Discos, KE allowed to recover Rs52b deferred FCAs from power consumers

Meanwhile, in two separate decisions, NEPRA has increased power tariff by Rs1.76 per unit and Re0.48 per unit respectively for the consumers of KE and XWDiscos on account of monthly FCA for the month of January 2023. In another separate decision, NEPRA has allowed the federal government to terminate electricity subsidies worth Rs65 billion to industrial and agriculture sectors, jacking up the electricity price by Rs12.13/unit and Rs3.60/unit respectively for both the sectors.

Regarding recovering Rs52b from power consumers, the Authority has decided to accept the policy guidelines of the federal government and allowed both power companies to recover the staggered FCA from the power consumers, NEPRA said in its decision regarding Ministry of Energy, Power Division’s Policy Guidelines for recovery of staggered fuel charges adjustment applicable for the months of August and September 2022 for Ex-WAPDA Distribution Companies & K-Electric Ltd. The federal government had sought NEPRA’s decision on the policy guidelines for transferring the burden of Rs52 billion to the electricity consumers on account of staggered fuel charges adjustments (FCAs) for the months of June and July 2022. 

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It is worth mentioning here that NEPRA had determined the FCAs of Rs9.8972/unit and Rs4.3435/unit for the months of June and July 2022, respectively. The XWDiscos FCA for both the months was supposed to be charged in the billing months of August and September 2022, respectively.

For the consumers of K-Electric, the regulator had determined an increase of Rs9.8972/unit on account of FCA to be charged in the August 2022 billing cycle. Similarly the tariff was increased by Rs8.0909/unit on account of FCA for June 2022, which was supposed to be charged in September 2022. Since the July FCA was negative Rs4.1171/ unit, therefore for June FCA the consumers were supposed to pay only an additional Rs3.9738/unit instead of Rs8.0909/unit hike determined by NEPRA on account of June FCA.  NEPRA had conducted public hearing on the MoE motion. During hearing, NEPRA had directed the Ministry of Energy to provide opinion from the Ministry of Law & Justice in the matter, also keeping in view the decision of the Supreme Court dated February 05, 2018. The MoE forwarded the Ministry of Law & Justice legal opinion on the matter which states; “It has been informed by the referring division that NEPRA determined the fuel cost adjustment for the month of Aug. -Sep-2022. However, owing to compelling circumstances, recovery of the same was deferred. In response to the of query of the referring Division, it is stated that the matter in hand, i.e. recovery of deferred fuel price adjustment already determined by NEPRA is different from the issue which was decided by the Supreme Court of Pakistan in the order/judgment dated February, 05,2018. Therefore, NEPRA being regulator may decide the referred query as per the provision of the NEPRA Act 1997”.

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According the NEPRA decision, XWDiscos will recover Rs 10.34 per unit from domestic protected consumers using zero to 200 units per month, Rs 14.24 per unit from non-protected consumers using zero to 200 units, Rs 14.24 per unit from those consuming 201 to 300 units per month and Rs 9.90 per unit from private agricultural consumers. The entire amount will be recovered from the electricity consumers in installments from March to October 2023. The power companies will recover staggered FCA amount from the consumers in eight months from March to October 2023. In its decision, the authority has also allowed the K-Electric to recover deferred fuel adjustment surcharge from the consumers up to Rs 13.87/unit. The KE will recover Rs 9.97/unit from domestic protect consumers using zero to 200 units per month, Rs 13.87/unit from non-protected consumers using zero to 200 units, Rs 13.87/unit from those consuming 201 to 300 units per month and Rs 9.90/ unit from private agricultural consumers. KE will also recover the amount during the months from March to October 2023. In its motion, the MoE had taken the plea that rebasing of uniform tariff determined by NEPRA and notified by the federal government in order to not burden the consumers disproportionately in a sequence of Rs 3.5/unit in July 2022 and Rs 3.5/unit in August 2022. Consumers were hit by Rs 9.8972/unit of FCA plus Rs 7 per unit of rebasing simultaneously in August billing. This was an average increase of Rs 16.90 per unit over and above the July rates. The above adjustments in tariff significantly increased the electricity bills for the months of August and September 2022. Moreover, the extensive flood due to abnormally heavy monsoon rains also affected consumers across the country. Under this scenario, the Prime Minister of Pakistan decided to stagger the recovery of XWD1SCOs and K-Electric FCAs applicable in August and September 2022. The staggered FCAs by both Discos and KE will be charged from March 1 to October, said the decision.

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