ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday concluded that K-Electric and ex-Wapda distribution companies (Discos) should refund to their consumers about Rs10.80 per unit and Rs2.32 per unit, respectively, under monthly fuel cost adjustment (FCA) mechanism to compensate higher than actual fuel costs overcharged in December 2022.

The decisions were made on Tuesday after two separate public hearings at the request of KE and Discos. The cumulative refund thus works out at Rs31.5bn, including Rs12.4bn on account of KE and Rs18.2bn payable by Discos.

The public hearings led by Nepra chairman Tauseef H. Farooqui were told by case officers that K-Electric had sought an FCA refund of about Rs10.26 per unit charged to its consumers under monthly fuel charges during December 2022, involving a negative financial adjustment of about Rs12.1bn in KE’s accounts. After minor adjustments here and there, Nepra worked the FCA refund at Rs10.80 per unit.

Likewise, the ex-Wapda Discos had proposed a refund of Rs2.20 per unit involving a negative revenue adjustment of about Rs18bn in February. The regulator, however, calculated a negative FCA of Rs2.32 per unit.

The regulator said it would issue formal notifications for implementation in a couple of days.

KE to return Rs10.8, Discos Rs2.32 per unit

On notification, Discos would pass on about half (slightly over Rs9bn) and KE about Rs6.3bn of the amount they overcharged to consumers because of a mechanism in vogue that prohibits reduction in FCA to be passed on to domestic consumers of less than 300 units and agricultural consumers on the premise that they were already subsidised.

Published in Dawn, February 1st, 2023