Consumers paying too much for electricity: NTDC

Islamabad:

Officials of the National Transmission and Dispatch Corporation (NTDC) made a shocking revelation on Wednesday that consumers were paying 40,000 megawatts (MW) of power despite consuming less electricity.

“Consumers use 12,000-13,000 MW of electricity but have to pay for 40,000 MW of power,” NTDC officials said during the National Electricity Regulatory Authority (Nepra) public hearing in the federal capital.

Consumers are set to get a nominal reduction in electricity rates of up to 31 paisa per unit due to fuel adjustment for the month of July 2024.

The Central Power Purchase Authority (CPPA) had asked for a reduction in electricity price by 31 paisa per unit. Consumers will get a relief of Rs 4.5 billion for the month of July, according to CPPA officials.

There was 4 percent less electricity generated from hydel resources in July, CPPA officials noted, adding that during this period, more electricity was generated from imported coal.

CPPA officials said global fuel prices continue to decline, noting that if economic indicators remain stable, electricity prices are expected to see only a small adjustment.

“If the losses are removed, how much relief will there be for consumers?” NEPRA member Rafiq Shaikh asked.

NTDC officials could not answer the question, leading Nepra members to express their displeasure over the lack of response.

NEPRA officials said that energy development has not picked up in the last six years.

“What was the cost of reducing system losses and how much of a burden did it put on consumers?” asked the Sheikh.

Shaikh requested further analysis to determine liability. “Electricity bills have now overtaken house rental costs. Reports indicate that house rents are increasing due to higher electricity bills. Hearing this news, we hang our heads in shame.”

Nepra completed the hearing and reserved its decision. The final decision will be made after further review of the data by the authority.

Quarterly adjustments for April to June 2024

Meanwhile, consumers are set to face a hike in electricity prices of up to Rs 1.89 per unit due to quarterly adjustment.

Nepra in a statement said that an application for the adjustment of the fourth quarter of the last financial year (2023-24) was submitted by the electricity distribution companies to it.

The authority conducted a hearing on this application on August 26, 2024. In the application, a total of Rs 46.991 billion had been sought for the adjustment of the fourth quarter of the year 2023-24.

If this quarterly adjustment is applied to September, October and November bills, it will come to Rs 1.89 per unit, according to Nepra.

The third quarter adjustment of 2023-24, which is Rs 0.93 per unit, is due to be completed in August. As a result, an increase of Rs 0.96 per unit is expected in September bills due to the quarterly adjustment.

Nepra further said that a fuel price adjustment request for July 2024 was submitted by CPPA on behalf of electricity distribution companies on August 15, 2024.

The authority considered this petition on August 28, 2024. The petition seeks a reduction of Rs 0.31 per unit, which will be reflected in the September bills.

Consumers paid a fuel price adjustment of Rs 2.56 per unit in their August bills. As a result, a reduction of Rs 2.87 per unit is expected in the September bills due to the fuel price adjustment.

Combining the two adjustments, consumers are expected to get a relief of Rs 1.91 per unit in their September bills, according to Nepra.