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Govt to Recover Rs. 52 Billion FCA Charges from Power Consumers

The federal government has sought policy guidelines from National Electric Power Regulatory Authority (NEPRA) for transferring the burden of a Rs. 52 billion to power consumers on account of fuel charges adjustments (FCAs) for the months of June and July 2022.

The government has requested the power regulator to issue policy guidelines for the recovery of Rs. 52 billion that it earlier deferred, between March 2023 to October 2023 according to the recovery rates mentioned for XWDISCOs and K-Electric respectively.

In a petition submitted to NEPRA, the federal government has requested the regulator’s policy guidelines under Section 31 of the Regulation, Generation, Transmission, and Distribution of Electric Power Act 1997 for recovery of staggered fuel charges adjustment applicable for the months of August and September 2022.

The federal cabinet, through circulation, has already approved the recovery of the amount on account of the two deferred FCAs.

NEPRA had determined the FCAs of Rs. 9.8972 per unit and Rs. 4.3435 per unit for the months of June and July 2022, respectively. The FCA for both the months was supposed to be charged in the billing months of August and September 2022, respectively, for XWDiscos.

For the consumers of K-Electric, the regulator had determined an increase of Rs. 9.8972 per unit on account of FCA to be charged in the August 2022 billing cycle. Similarly the tariff was increased by Rs. 8.0909 per unit on account of FCA for June 2022, which was supposed to be charged in September 2022.

Since the July FCA was negative Rs. 4.1171 per unit, therefore for June FCA the consumers were supposed to pay only an additional Rs. 3.9738 per unit instead of Rs.8.0909 per unit hike determined by NEPRA on account of June FCA.

The rebasing of uniform tariff determined by NEPRA and recommended by it as “final tariff’ for publication in the official gazette was notified by the federal government in order, to not burden the consumers disproportionately in a sequence of Rs. 3.5 per unit in July 2022 and Rs. 3.5 per unit in August 2022. Consumers were hit by Rs. 9.8972 per unit FCA plus Rs. 7 per unit of rebasing simultaneously in August billing. This is an average increase of Rs. 16.90 per unit over and above the July rates. The above adjustments in tariff significantly increased the electricity bills for the months of August and September 2022.

Moreover, the extensive flood due to abnormally heavy monsoon rains also affected consumers across the country. Under this scenario, the prime minister decided to stagger the recovery of XWD1SCOs and K-Electric FCAs applicable in August and September 2022.

In order to extend the flood relief to a limited class of domestic consumers, the federal government in giving effect to its economic and social policy objectives and is pleased to issue the following guidelines to make adjustment on account of the variation of fuel charges in the approved tariff of XWDISCOs and K-Electric to the extent of staggered recovery as follows:

Non-ToU Domestic (Protected) consumers having 200 units consumption would only pay Rs. 3.8972 per unit FCA in August 2022 billing month. The remaining FCA of Rs. 6 per unit (out of a total Rs. 9.8972 per unit) would be recovered subsequently.

Non-ToU Domestic (Protected) consumers having 300 units of consumption and private agriculture consumers would not pay any FCA in the August 2022 billing month. FCA of Rs. 9.8972 per unit would be recovered subsequently.

Non-ToU Domestic consumers having 300 units of consumption during the month of July 2022, would not pay any FCA in September 2022 billing month. FCA of Rs. 4.3435 per unit would be recovered subsequently.

Non- ToU Domestic consumers of K-Electric having 300 units consumption during the month of July 2022 would not pay any FCA in September 2022 billing month. FCA of Rs. 3.9738 per unit (after passing on the negative FCA of Rs. 4.1171 per unit for the month of July 22 to consumers having consumption 300 units as well) would be recovered subsequently.

The policy guidelines as approved by the federal government for recovery of staggered fuel charges adjustment applicable for the months of August and September 2022, under section 3 1 of Regulation, Generation, Transmission and Distribution of Electric Power Act, 1997 is hereby conveyed for consideration of the Authority.

The recovery of the above-mentioned deferred FCAs in the period of eight months starting from March 2023 to October 23 in accordance the recovery rates mentioned for XWDISCOs and K-Electric respectively.

The federal government intended to implement the deferred FCA recovery as mentioned above with effect from March 1, 2023. The federal government has requested that a hearing opportunity be provided for detailed submissions including session with the technical professional team of the Authority prior to hearing. NEPRA will conduct public hearing on March 2, 2023.

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