ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved a Rs1.23 per unit negative fuel cost adjustment (FCA) for consumers of ex-Wapda distribution companies (Discos) and K-Electric (KE) in their current month’s electricity bills.
For Discos, the negative FCA applies to electricity consumed in December, while for KE, it corresponds to consumption in November. However, Nepra’s Member Tariff Mathar Niaz Rana criticized the Rs1.23 per unit adjustment for KE, arguing that the company initially proposed a Rs4.98 per unit refund amounting to Rs7.18 billion. Nepra had calculated an FCA of over Rs5 per unit, totaling Rs7.22 billion, but ultimately decided—by majority vote—to pass on only Rs1.23 per unit to KE consumers.
Nepra justified this decision by citing KE’s pending claims of Rs8.7 billion for part loan payments, open-cycle operations, start-up costs, and degradation curves under its multi-year tariff from July 2023 to June 2024. To avoid burdening consumers later, Nepra retained Rs5.44 billion from the FCA adjustment.
Public Hearing on Rs53 Billion Refund
Nepra also conducted a public hearing on a proposed Rs53 billion refund to consumers for the second quarter (September-December 2024) of the current fiscal year. The refund stems from three major factors:
Rs18 billion from debt reprofiling of Karachi Nuclear Power Plants (K2 and K3).
Rs18 billion due to the non-payment of capacity charges for the closed Neelum-Jhelum Hydropower Project.
Rs12 billion from the termination of contracts with old Independent Power Producers (IPPs).
Discos Face Backlash Over Security Deposit Hike
Meanwhile, Discos faced strong opposition from consumer groups and scrutiny from Nepra over their proposal to increase security deposits—some exceeding 2,600%. At a public hearing, it was revealed that eight out of nine Discos held over Rs77 billion in consumer security deposits as of January 2025, earning approximately Rs13 billion in interest.
Nepra members, including Rafique A. Shaikh, Mathar Niaz Rana, Maqsood Anwar, and Amina Ahmed, grilled Discos over their request, announcing plans to audit existing consumer security deposits. Though K-Electric and Sukkur Electric Power Company (Sepco) have not yet filed petitions for a security deposit increase, they are expected to follow suit for uniformity in tariff and regulations.
Industrialists in Karachi warned that if the hike is implemented, they would opt out of the grid and shift to alternative energy sources, particularly solar power, rather than pay an additional Rs250-300 million in security deposits.
Irfan Butt, representing Discos, acknowledged that an excessive security deposit increase could drive consumers away from the grid, reducing electricity demand.
Story by Khaleeq Kiani
