Nepra Considers Tariff Cut Following CPPA-G’s Request

The National Electric Power Regulatory Authority (Nepra) is planning to reduce the electricity tariff by Rs0.63 per unit for November 2024, following a request from the Central Power Purchasing Agency-Guarantee (CPPA-G) to lower the tariff from Rs7.8609 to Rs7.2274 per unit. This adjustment is intended to refund around Rs 4.9 billion to consumers under the monthly Fuel Charges Adjustment (FCA).

According to the data submitted to Nepra, hydropower generation accounted for 35.61% of the total electricity produced in November, while local coal-fired power plants generated 12.68% and imported coal 5.94% of the total power. Renewable energy sources like wind, bagasse, and solar energy also made significant contributions to the energy mix. The CPPA-G cited a decrease in fuel costs as the reason for the requested tariff reduction.

The data revealed that the total energy generated in November 2024 was 8,032 GWh at a basket price of Rs 7.2825 per unit, with a total cost of Rs 58.490 billion. Net electricity delivered to Discos was 7,716 GWh at a rate of Rs 7.2274 per unit, with a total cost of Rs 55.765 billion. The Pakistan power companies, known as Discos, have also filed a petition seeking a refund of around Rs2.5 billion to consumers for November, which could be the fifth consecutive month of a negative fuel cost adjustment (FCA). The main reason for this negative FCA is a 20% increase in base tariff that went into effect on July 1, 2024, resulting in a significant fuel allowance.

Nepra has scheduled a public hearing on December 31, 2024, to finalize the decision on the proposed tariff cut and consider the petition submitted by the Discos. This move is likely to benefit consumers by reducing their electricity bills, especially in the face of a 5.9% increase in power consumption in November compared to the same month last year, mainly due to a drop in temperature.

The power sector continues to be a focus area for regulatory bodies and management across the country, and this decision has the potential to impact the financial stability and affordability of electricity for millions of consumers in Pakistan. The discussion around fuel costs, tariffs, and charges adjustments is set to ongoing in the coming weeks as stakeholders meet and debate the new proposal.