ISLAMABAD (Daily Point) — Consumers may face an additional financial burden of Rs33 billion if the National Electric Power Regulatory Authority (NEPRA) approves a proposed Rs4.66 per unit increase in power prices for January 2024 bills.

According to local English newspaper The News, the increase is linked to fuel adjustment for November 2023, as discussed in a public hearing on the plea by the Central Power Purchasing Agency (CPPA), representing Discos in the case.

NEPRA raised questions about the operation of power plants using imported fuel while shutting down more cost-effective ones for maintenance. The shutdown of the Thar coal-based plant for maintenance contributed to higher electricity prices.

Furthermore, a 13% decrease in electricity consumption and the use of power plants running on expensive imported LNG fuel in November 2023 added to the financial burden on consumers.

NEPRA’s chairman explained that when demand falls below the reference level, negative growth in power generation raises costs, leading to adjustments in monthly fuel charges (FCAs) and quarterly adjustments (QTAs). Due to low-capacity utilization, capacity charges rise, and consumers must cover fixed charges at all costs. In its petition, CPPA had requested passing on previous adjustments of Rs15.9 billion (Rs2.117/unit) to consumers in January 2024 bills.

In response to allegations of overbilling, NEPRA emphasized its track record of implementing past decisions and pledged to enforce its recent decision. The regulator issued explanations to power distribution companies (Discos) and hinted at legal actions against them.

Regarding recent load shedding, the CPPA explained, “Discos manage loads due to losses, hydel generation has decreased, expensive generation is occurring, and gas supply is unavailable to power plants, leading to load management. Additionally, in line with government policy, we implement 2-hour load management.”

Meanwhile, the Power Division attributed recent load shedding on December 25th and 26th to multiple grid station failures in the Multan region and other Discos. The tripping of 132kv, 220kv, and 500kv grid stations, coupled with reduced hydel generation due to fog, created system constraints. A 1,600 MW shortfall in generation was attributed to canal closure, and a 700 MW shortage was due to limited LNG availability.

The Power Division is actively working to minimize shortfalls, using furnace oil to compensate for the LNG shortage and generate 800 MW. Load shedding was deemed necessary to manage system constraints, and ongoing efforts are in place to stabilize the system.