NEPRA Approves a Gigantic Increase in Electricity Rates

National Electric Power Regulatory Authority (NEPRA) has decided to increase the power tariff by Rs 5.94 per unit, which is historically the highest on account of monthly Fuel Cost Adjustment (FCA).

A hearing was conducted on Central Power Purchasing Agency (CPPA) petition by NEPRA to ascertain the FCA for January 2022 with Chairman NEPRA, Tauseef H. Farooqi, in the chair.

The Central Power Purchasing Agency had requested an increase in electricity prices by Rs. 6.10 per unit in terms of monthly fuel adjustment for January 2022.

During the briefing regarding the generation data, it was informed that in January, 33.15 percent of the total electricity was generated from coal and 5.83 percent through hydropower stations.

The share of diesel stood at 6.73 percent, while furnace oil contributed 14.07 percent. Local gas was used to generate 14.37 percent of the electricity and LNG for 7.12 percent. Nuclear fuel accounted for 14.37 percent of the total production, wind 2.22 percent, and bagasse 1.22 percent. Electricity imported from Iran accounted for 0.36 percent and the contribution of solar power was 0.53 percent.

The most expensive electricity was generated from high-speed diesel (HSD) during January 2022. The cost of the electricity produced using HSD registered at Rs. 25.98 per unit. This was followed by furnace oil that stood at Rs. 22.80 per unit, LNG at Rs. 16.70 per unit, coal at Rs. 14.10 per unit, gas at Rs. 7.74 per unit, nuclear at Rs. 1.07 per unit, and bagasse at Rs. 5.98 per unit.

During the hearing, Chairman NEPRA asked why LNG was used less in January for power generation, while diesel and furnace oil were used more? Officials responded that the availability of LNG was far less than the demand.

NEPRA Chairman, Tauseef Farooqi, said that the industry had used 16 percent more electricity in January. “If LNG was procured through long-term contracts, there would be no shortage, nor would such a burden fall on the people,” he commented.

NEPRA officials said that the LNG shortage in January had an additional burden of Rs. 7.74 billion, which put an additional burden of 92 paisa per unit on consumers. According to officials, if licensed power plants of solar and wind were running, there would have been a further reduction of Rs. 1 in the tariff.

NEPRA Authority, after hearing, approved an increase in the price of electricity by Rs. 5.94 per unit, which is the highest as per determined FCA in the history, which would result in an additional burden of Rs. 58 billion on electricity consumers. The increase will not apply to Lifeline and K-Electric consumers. However, NEPRA will soon issue a notification, and the consumers would be billed in March.

Faiz Paracha is a seasoned broadcast journalist with over 15 years’ experience in reporting and e...