The National Electric Power Regulatory Authority (Nepra) revealed on Tuesday that a proposed negative fuel cost adjustment (FCA) could lead to a tariff increase of 26 paise per unit in December. The adjustment request, submitted by ex-Wapda distribution companies (Discos), aims to reflect fuel cost changes for October.
A Nepra official explained during a public hearing that the Central Power Purchasing Agency (CPPA) requested a Rs1.02 per unit negative FCA for electricity consumed in October. However, the current negative FCA of Rs1.28 per unit, applied in November, is expiring. This change will effectively raise tariffs by 26 paise per unit.
Power Supply and Costs in October
The CPPA reported that power supply in October was slightly higher than projections, with a 0.03% increase over the reference fuel cost. Compared to the same period last year, supply rose by 6.8%. Total electricity consumption for the month stood at 9.98 billion units (GWh), an increase of 7.87% over October 2023.
Fuel costs for October were 19% lower than last year. Average fuel costs dropped to Rs9.25 per unit, compared to Rs11.43 in October 2023. Power companies attributed this decline to a higher base tariff implemented earlier this year.
Breakdown of Power Generation
Electricity generation for October reached 10,262 GWh at a fuel cost of Rs93 billion (Rs9.059 per unit). Of this, 9,981 GWh was delivered to Discos at Rs92.4 billion (Rs9.26 per unit).
Hydropower contributed the largest share, supplying 31% of electricity at zero fuel cost. LNG-based power followed with 19.5%, while local coal accounted for 14.8%. Nuclear power contributed about 14.05% of the total.
Coal-based generation increased to 24% of total supply, up from 19.3% in September. Local coal’s share rose to 14.8%, while imported coal dropped to 8.8%.
Generation Costs by Source
The cost of LNG-based power stood at Rs22.64 per unit. Imported coal cost Rs16.9 per unit, while local coal was cheaper at Rs11.18 per unit. Furnace oil-based power generation cost Rs29.14 per unit but accounted for only 0.02% of total supply.
Renewable energy sources, including wind, bagasse, and solar, contributed 3.3% to the grid. Bagasse-based generation costs dropped to Rs5.85 per unit in October, compared to Rs12.48 in September. Electricity imported from Iran made up 0.4% of total supply, costing Rs25.
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