Electricity consumers may face Rs1.20 per unit hike in August bills

Power companies have asked the National Electric Power Regulatory Authority (Nepra) to approve a Rs1.20 per unit fuel cost adjustment for electricity consumers in August.

If approved, the increase will apply to consumers of all distribution companies, including K-Electric, and will allow power companies to recover about Rs15.7 billion through August electricity bills. Nepra has scheduled a public hearing on July 29 to consider the request.

The petition was filed by the Central Power Purchasing Agency (CPPA), which said the increase was mainly due to the higher cost of imported fuels, particularly Regasified Liquefied Natural Gas (RLNG).

According to the CPPA, electricity consumption in June stood at 13,066 million units, slightly lower than the 13,310 million units recorded in the same month last year.

The agency said the reference fuel cost for June was Rs7.714 per unit, but the actual cost reached Rs8.90 per unit. It has therefore requested a fuel cost adjustment of Rs1.20 per unit.

The CPPA said electricity generated from RLNG cost about Rs35 per unit in June, compared with Rs16 per unit a year earlier. Power generated from furnace oil and diesel also remained expensive at around Rs52 and Rs57 per unit, respectively, although both fuels accounted for less than 1% of total electricity generation.

Most of the country's electricity in June came from lower-cost domestic sources. Hydropower contributed 39% of total generation, followed by nuclear power at 13.5%, local coal at 10%, and local gas at 6.5%. Wind, solar and bagasse-based plants contributed the remaining share.

Electricity generated from local coal cost Rs11.5 per unit, compared with Rs16.65 per unit from imported coal. Local gas-based generation cost Rs13.7 per unit, while nuclear power remained one of the cheapest sources at Rs2.85 per unit.