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ISLAMABAD: The Power Division has sought Cabinet’s ex post facto approval to stagger FCA of Distribution Companies (Discos) and K-Electric, enabling the Power Division to file a motion before the Nepra, official sources told Business Recorder.

FCA is determined by the Nepra as per section 31(7) of the NEPRA Act on monthly basis. As per the existing tariff methodology, Power Purchase Price (PPP) billed to consumers is subject to adjustment on account of variation in fuel cost on monthly basis and reflected uniformly in the consumers’ monthly bill as FCA with a lag of two months.

Fossil fuel prices have escalated unprecedentedly in the international market, leading to exceptionally high FCAs for consumers during the current year. Rates of RFO, RLNG and coal have surpassed Rs. 172,000/M Ton, Rs. 4,000/MMBTU and Rs. 65,000/Ton in recent months as compared to Rs. 76,000 /M. Ton, Rs. 1,600/MMBTU and Rs. 20,000/Ton respectively last year.

Sharing the details, sources said, pursuant to this, the Nepra has determined the FCAs of Rs. 9.8972/unit and Rs. 4.3435/unit for the months of Jun-22 and Jul-22 to be charged in the billing months of Aug-22 and Sep-22 respectively for Discos. Similarity, for K-Electric consumers, the Nepra has determined Rs 9.8972 per unit of FCA to be charged in Aug-22 billing cycle (Rs. 6.8858/unit of May-22 and Rs. 3.0114/unit of June-22) and Rs. 3.9738 per unit FCA to be charged in Sep-22 billing cycle (Rs. 8.0909/unit of Jun-22 and Rs. 4.1171/unit of Jul-22). Rising fuel prices are the principal reason for increased electricity prices, not only in Pakistan but worldwide.

Aug 2022 FCA: KE to refund Rs7.2bn to consumers

Further, the uniform tariff determined by the Nepra and recommended by it as “final tariff” for notification in the official gazette has also been notified by the Federal Government by passing on Rs 3.5/unit in July 2022 and Rs 3.5/unit in August 2022. As the fate would have it, consumers have been hit by Rs 9.90 per unit of FCA plus Rs 7 per unit of rebasing delta in August billing. This is an average increase of Rs 16.90 per unit over and above the July rates.

The Power Division argued that adjustments in tariff have significantly increased the electricity bills for August 2022. Moreover, the flood situation caused by abnormally heavy monsoon rains has also affected the consumers across the country. Especially, agriculture is the most flood affected sector. The Prime Minister held a series of meetings on 22, 23 August 2022, September 1 and 13, 2022 and directed as follows: (i) non-ToU domestic (protected) consumers having 200 units consumption would only pay Rs 3.8972/unit FCA in August 2022 billing month. Remaining FCA of Rs. 6/unit (out of total Rs. 9.8972/unit) would be recovered through applying Rs. 1/unit FCA in six months (Oct-22 to Mar-23); (ii) non-ToU domestic (non-protected) consumers having 300 units’ consumption and private agriculture consumers would not pay any FCA in August 2022 billing month. FCA of Rs. 9.8972/unit would be recovered through applying Rs. 1.65/unit FCA in six months (Oct-22 to Mar-23); (iii) non-ToU domestic consumers having 300 units’ consumption during the month of July 2022 would not pay any FCA in September 2022 billing month. FCA of Rs 4.3435/unit would be recovered through applying Rs. 0.72/unit FCA in six months (Oct-22 to Mar-23); (iv) non-ToU domestic consumers of K-Electric having 300 units’ consumption during the month of July 2022, would not pay any FCA in September 2022 billing month. FCA of Rs. 3.9738/unit (after passing on the negative FCA of Rs 4.1171 unit for the month of Jul-22 to consumers having consumption s 300 units as well) would be recovered through applying Rs. 0.66 unit FCA in six months (Oct-22 to Mar-23); (v) in flood affected areas, electricity bills for the month of September 2022 would be deferred for commercial consumers till next billing cycle. In flood affected areas, electricity bills for the months of August and September 2022 would be waived off for non-ToU domestic consumers having 300 units’ consumption. This would have subsidy requirement of Rs. 10.3 billion. The Power Division, sources said, maintained that since the Prime Minister has already announced the staggering of FCA and the Power Division has issued instructions for implementation to Discos and K-Electric on August 24, 2022, September 3 and 16, 2022.

Copyright Business Recorder, 2022

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