Islamabad – Public sector power companies have proposed a Rs1.04 per unit negative fuel cost adjustment (FCA) for electricity consumed in December 2024, potentially refunding Rs3.9 billion to consumers in February if approved by the National Electric Power Regulatory Authority (Nepra).
The Central Power Purchasing Agency (CPPA) filed the petition, highlighting a 1.3% year-on-year increase in power demand and a 13% reduction in fuel costs compared to December 2023. The petition attributes this reduction to a higher base tariff implemented in July 2024 and increased reliance on domestic fuel sources, with 78% of electricity supplied from local sources, nearly half of which incurred zero fuel cost.
Nepra has scheduled a public hearing on January 30 to consider the proposal. The CPPA reported an average fuel cost of Rs9.60 per unit for December 2024, down from Rs11 per unit in December 2023. The adjustment, if approved, would apply to February 2025 billing.
Key Highlights:
Generation and Costs: Approximately 7,800 GWh of electricity was generated at a cost of Rs71 billion (Rs9.09 per unit), with 7,516 GWh delivered to distribution companies at Rs9.60 per unit.
Energy Mix: Nuclear energy led with a 26.5% share of the national grid, followed by hydropower at 22.8%, RLNG at 20.7%, and local gas at 12.3%. Coal-based generation dropped significantly to 11.6% from 19% in November.
Cost Variations: Nuclear power remained the cheapest at Rs1.7 per unit, while RLNG-based generation cost Rs22.73 per unit. Renewable energy sources, including wind and solar, contributed 5.6% to the grid with no fuel cost.
The proposed negative FCA continues a six-month trend of refunds due to declining fuel costs and an increased share of low-cost domestic energy sources. The decision aims to provide financial relief to consumers while maintaining the sustainability of power sector revenues.
