ISLAMABAD: As the government confirmed on record a minor impact of solar net metering on electricity sales, the National Electric Power Regulatory Authority (Nepra) on Thursday notified Rs3.33 per unit additional fuel cost against consumption in April to enable ex-Wapda distribution companies (Discos) to raise an additional Rs29 billion in June.
According to an order from the regulator, Nepra “has reviewed and assessed a National Average Uniform increase of Rs3.3321/kWh in the applicable tariff for ex-Discos on account of variations in the fuel charges for April 2024.”
The impact of the FCA would result in a partial spillover to the quarterly tariff adjustment (QTA), which would happen later, meaning that the net tariff increase would be approximately Rs6 per unit.
The “RS3.3321/kWh adjustment shall apply to all consumer categories, with the exception of lifeline consumers and electric vehicle charging stations (EVCS).” According to Nepra’s statement, the adjustment would appear individually in the June invoices depending on the units used in April.
In making its decision, the regulator also noted that, according to information provided by PITC, the Central Power Purchasing Agency (CPPA) had “included 100 GWh (gigawatt hours) for the net metering units procured during April.” This amounts to a meager 1.15 percent of the 8,640Gwh that are currently in the national grid. The CPPA reported in March that solar net metering contributed 54.7 Gwh, or 0.7 percent of the 7,756 Gwh total grid supply.
This suggested that the story against solar net metering homeowners was being used to hide some other issues with the power network’s efficiency. Due to a combination of factors including decreased temperatures, altered consumption habits brought on by the economic downturn, and consumers switching to alternative sources, April’s consumption was over 14% less than it was in the same month previous year.
According to the CEO of CPPA, which was cited by Nepra, local coal and hydropower generation were less than what the reference tariff had projected. According to him, there was little difference between the real and reference fuel prices; yet, some fuels, such as RLNG, were used more frequently than the reference values due to contractual responsibilities and system requirements.
The CPPA stated during the public hearing that “orders for procurement of RLNG were already placed due to the anticipated increase in demand in April, and the power sector would have to bear the financial burden in the event that the ordered quantity was not utilized.” With fuel costs of Rs75 billion, the significant usage of RLNG was estimated to have a financial impact of Rs32 billion in April.
Regarding the limited use of the Thar coal power stations, CPPA stated that, taking into account the demand pattern and system stability, the overall use of these units stayed at roughly 50% in April. In response to the suspension of Thar-based plants, NTDC stated that the weather had kept demand low.
This FCA rise comes on top of an approximately 26% annual base tariff increase and an additional 18% increase under two quarterly tariff adjustments that consumers must pay at a rate of Rs4.65 per unit.
