Government-owned distribution companies (discos) are charging double the fuel cost of electricity as advance billing. They are refunding only half amount of the extra charges on NEPRA’s orders, with the rest of the amount – Rs. 120 billion – going into their own pockets each year.
This news was revealed at a public hearing on Wednesday when the National Electric Power Regulatory Authority (NEPRA) ordered the discos to refund Rs 20 billion to consumers for overcharging them in July. The refund is said to be adjusted in the next billing month.
NEPRA Vice Chairman Saifullah Chattha questioned the Central Power Purchasing Agency (CPPA) and National Transmission and Despatch Company (NTDC) about the refunds returned to the smaller customers (average consumers) that did not get a fuel cost relief due to the government policy.
Muhammad Rehan and Muhammad Ilyas from CPPA and NTDC replied that the refunds might vary each month, depending on consumer data available at discos.
Around 67-70% of customers use less than 300 units of electricity per month.
The discos are charging a much higher fuel cost under this practice. The companies then adjust the estimated cost in the following month against the actual fuel cost after getting an approval from NEPRA. This improves their cash flows and allows the discos to make billions of Rupees in advance.
According to the decision of the PML-N government, the relief in the rates of electricity will not be provided to agricultural and residential users who utilize less than 300 units of electricity on monthly basis. These consumers are already getting subsidized rates for electricity consumption which is why they won’t be getting any discounts or relief.
Power Generation Statistics
According to the petitioner, over 11,496 gigawatt hours (GWh) of electricity were generated in July and 12,267 GWh were provided to discos due to almost 1.73% system losses.
It was reported that the cheapest source of electricity, namely hydroelectric power, contributed about 30.8% of the power generated and was slightly higher than last month’s output by 0.3%. Wind and solar power production together contributed about 2.3% energy at no added fuel cost.
The other sources of power generation such as furnace oil-based power plants contributed 25.6% compared with 22.34% last month. Due to the higher production and low oil prices, the per-unit cost of furnace oil-based plants dropped to Rs 9.36 per unit in July against Rs 9.5 per unit in June.