Following the highest-ever increase in petroleum prices effective February 16, the Government has prepared a plan to raise electricity prices by Rs6.10 per unit for consumers of power Distribution Companies (Discos) for January 2022 under the monthly Fuel Charges Adjustment (FCA) mechanism.

The key reason for the proposed increase in FCA for the month of January is the massive decline in hydel generation and the higher cost of imported fuels, i.e., coal, furnace oil, RLNG, and HSD. The government intends to pass on the financial impact of Rs60 billion including GST to the consumers.

The National Electric Power Regulatory Authority (NEPRA) is scheduled to hold a public hearing on February 28, 2022 to quiz CPPA-G on the data on the basis of which the highest ever increase in FCA has been sought.

The impact of the proposed increase will be passed on to all categories of consumers of Discos including lifeline consumers having ToU meters. It will also affect KE consumers to the extent of 1100-1300 MW being purchased from the national grid. KE will submit its application separately based on Discos approved rates.

According to the data submitted to Nepra, in January 2022, hydel generation reduced to 512.94 GWh constituting just 5.83 per cent of total generation from 1,769 Gwh (20.04 per cent of total generation) in December 2021.

Power generation from coal-fired power plants was 2,917.70 GWh in January 2022 against 2,104 GWh in December 2021. The data also shows that coal generation was 33.15 per cent of total generation in January as compared to 23.83 per cent in December 2021. The price of coal generation was Rs 14.1049 per cent in January as compared to Rs 13.3122 per unit in December 2021.

Generation from HSD was recorded at 592.08 GWh in January 2022 (6.73 per cent of total generation) at a price of Rs 25.9801 per unit against 251 GWh (2.84 per cent) at Rs 14.0862 per unit in December 2021. Generation from RFO massively increased to 1,238.11 GWh in January 2022 (14.07 per cent of total generation) against 353 GWh (4 cent of total generation) in December 2021 at a cost of Rs 22.2446 per unit.

Electricity generation from gas-based power plants was 1,264.36 MW in January 2022 (14.37 per cent of total generation) at a cost of Rs 7.7471 per unit against 1,216 GWh (13.77 per cent of total generation) in December 2021 at Rs 7.7489 per unit.

Generation from RLNG was 626.08 GWh (7.12 per cent of total generation) at Rs 16.7034 per unit in January 2022 as compared to 1,192 GWh (13.54 per cent of total generation) at Rs 17.8066 per unit in December, 2021.

Electricity generation from nuclear sources was 1,264.57 GWh (14.37 per cent of total generation) at a cost of Rs 1.0756 per cent in January 2022 as compared to 1,549 GWh at Rs 1.0598 per unit in December 2021. Electricity imported from Iran was 31 GWh at cost of Rs 15.0073 per unit in January 2022 as compared 36 GWh at Rs 13.2683 per unit in December 2021.

Power generation from different sources (mixed) was just 2.30 GWh at a price of Rs 6.2900 per unit whereas generation from bagasse recorded at 107 GWh price of which has been calculated at Rs 5.9822 per unit.

The energy generated from wind was recorded at 194.88 GWh, 2.22 per cent of total generation and solar at 46.58 GWh, 0.53 per cent of total generation in January 2022.

The total generation recorded at 8,797 GWh at a basket price of 15.2199 per unit in January 2022 as compared 8,827.05 GWh at a basket price of Rs 8.2430 per unit. The total cost of energy was Rs 107.503 billion. The sale to IPPs was reduced by 45.79 GWh, the price of which was Rs 1.247 billion (Paisa 27.23 per unit) while the reduction in transmission losses was recorded at 330.85 GWh. According to the CCPA-G data, net electricity delivered to Discos was 8,420.73 GWh in January 2022 at a price of Rs 12.6184 per unit as compared to 8,530 GWh in December 2021.

CPPA-G in its tariff petition maintains that since the reference fuel charges for January 2022 were estimated at Rs 6.5124 per unit whereas the actual fuel charges were Rs 12.6184 per unit, hence an increase of Rs 6.1060 per unit has been sought for January 2022 under FCA mechanism.

The story was originally published in Business Recorder on January 20, 2022.