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The National Electric Power Regulatory Authority (Nepra) is set to hold a public hearing on August 31 regarding a proposed fuel cost adjustment (FCA) of Rs4.69 per unit for July’s electricity consumption, requested by the Central Power Purchasing Agency (CPPA) on behalf of power distribution companies (Discos). This adjustment, reflecting a significant shift towards cheaper indigenous fuels like nuclear and hydropower, could generate an additional Rs65 billion in revenue for Discos in September. The increase in FCA is due to nearly 64% of July’s electricity being generated from domestic resources, a notable rise from previous months, with hydropower making the largest contribution.
The cost adjustment, if approved, will apply to all consumers except those using fewer than 50 units monthly, adding Rs4.69 per unit to September’s bills. This move comes after a decrease in the use of expensive imported RLNG and an increase in hydropower and nuclear energy contributions. Coal’s share in electricity generation has decreased due to various challenges, while renewable energy sources like solar, wind, and bagasse have slightly decreased their contribution.
In July, the cost of electricity production reached Rs10.71 per unit, with the actual cost to Discos being Rs10.98 per unit, leading to the proposed additional charge. This adjustment is part of ongoing efforts to manage the fluctuating costs of energy production and consumption in the country.
