The National Electric Power Regulatory Authority (Nepra) – the country’s power regulator – has approved to reduce per unit cost of electricity by Rs0.07 on account of fuel adjustment for the third quarter of the fiscal year 2020-21.

This new tariff will apply from October 1, 2021 and will remain in place for one year. According to a source, the authority has sent its recommendation to the federal government.

Nepra took the decision in view of the requests of the distribution companies (Discos). The new tariff will apply to all consumers except the lifeline consumers. It will also not apply to the consumers of the K-Electric, the power utility that supplies electricity to the country’s financial hub, Karachi.

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Nepra on June 3 approved to cut electricity rates by Rs0.43 per unit on account of fuel adjustment for the month of April 2021 as the Central Power Purchasing Agency (CPPA-G) had charged Rs0.43 per unit or Rs4.4 billion over and above the actual electricity cost from consumers in April.

In a public hearing on the CPPA-G’s petition for April on account of fuel adjustment, the regulator had noted that after the calculation CPPA-G needed to return Rs0.86 per unit, against Rs0.84 per unit requested by the petitioner, to power consumers for the month of April. However, half of this amount (Rs0.43 per unit) was to be adjusted against previous adjustments for the past months.

The hearing, which was presided over by Nepra Chairman Tauseef H Farooqi, also noted that instead of Regasified Liquefied Natural Gas (RLNG), expensive fuel was utilised to run the power plants in violation of the merit order.

Read more: NEPRA slashes power tariff by Rs0.21

At the hearing, Nepra officials said running the plants without merit order cost the consumers huge losses. The power companies had burdened consumers by not using RLNG for power generation.

Nepra had approved a reduction of Rs0.86 per unit in fuel adjustment. However, the regulator had allowed a past adjustment of Rs4.47 billion to the CPPA, depriving consumers of half (Rs0.43 per unit) of the relief and allowing it to pass on another half of the amount (Rs0.43 reduction) to consumers.

The consumers were to get their extra charged Rs4.4 billion in the next bills. The decision did not apply to consumers using 100 units and K-Electric consumers.