NEPRA to Review Power Tariff Hike Request

Power distribution companies have requested a tariff hike of up to Rs3.48 per unit, awaiting approval from the National Electric Power Regulatory Authority (NEPRA) to levy an additional Rs3.488 per unit from consumers through the fuel charges adjustment (FCA) for April 2024. The Central Power Purchasing Agency (CPPA) submitted the petition on behalf of XWDiscos, with a public hearing set by NEPRA on May 30, 2024.

In April 2024, a total of 8,639 GWh of electricity was generated, costing Rs79.55 billion, with 8,375 GWh delivered to distribution companies at a cost of Rs75.205 billion, factoring in transmission losses of 2.73 percent. A backward adjustment of Rs3.06 billion was decided to bring the total amount down to Rs75.2 billion.

Power generation in April 2024 witnessed a 2.2 percent rise to 881 GWh from local coal, while imported coal contributed 21 GWh. The government's reduced electricity production from renewable sources in April had a negative impact on consumer costs.

The reference fuel cost charged to consumers in April stood at Rs5.4918 per unit, whereas the actual fuel cost incurred was Rs8.9801 per unit. The CPPA argues that consumers should bear the additional cost burden of Rs3.4883 per unit.

Comparing power generation in April 2024 to the previous year, there was a 13.7 percent decrease, but a 7.7 percent increase from March 2024. Hydropower generation surged by 10.6 percent, while coal-based generation plummeted by over 50 percent. Natural gas-based power generation dropped by 18 percent, RLNG-based generation by 10.8 percent, and nuclear power production increased by 6.6 percent.

K-Electric (KE) secured NEPRA's approval for its Power Acquisition Programme (PAP) for FY 2024-2028, aiming to bolster power supply reliability and sustainability in Karachi. The program includes initiatives to integrate renewable energy, local fuel, and power off-take from the National Grid, aligning with national electricity policies and plans.

KE's vision involves adding 1,282 MW of renewable energy by 2030, encompassing solar and wind projects, with a strong emphasis on sustainability and reducing the carbon footprint.

The proposed tariff increase by power distribution companies reflects the evolving dynamics of the energy sector, with a focus on balancing costs and sustainability. Consumers may face higher electricity bills due to the additional burden, highlighting the importance of efficient energy management and the transition towards renewable sources for a greener future.