Nepra Endorses Winter Demand Initiative and Fuel Charge Adjustments

Islamabad: The National Electric Power Regulatory Authority (Nepra) has approved the federal government’s Winter Demand Initiative for electricity consumers of XDISCOS and K-Electric (KE), according to a report by The News on Saturday. The initiative, designed to encourage higher electricity consumption during winter months, also includes provisions for industrial net metering and wheeling consumers, who were initially excluded.

Key Features of the Winter Package

• Pricing: Additional electricity consumed, compared to the same period last year, will cost Rs26.07 per unit.
• Validity: The package will remain effective from December to February.
• Relief Timeline: Consumers will see the benefits reflected in their December bills.
• Benchmark Consumption: The baseline for additional consumption will be the higher of either the corresponding month’s usage in FY 2024 or the historical average over the past three years.

Subsidy-Neutral Approach

Nepra clarified that the initiative is subsidy-neutral and will not affect the tariff determined by the authority. Variations in marginal costs will be addressed through monthly Fuel Charge Adjustments (FCAs). If costs decrease, the savings will be shared with consumers through quarterly tariff adjustments.

Inclusion of K-Electric Consumers

Initially excluded, KE consumers will now benefit from the winter package, following Nepra’s recognition that their exclusion would hinder sales growth and create discriminatory practices. KE has committed to providing the same relief as other distribution companies, and adjustments to consumer tariffs will reflect this inclusion.

Nepra is also reviewing KE’s Multi-Year Tariff (MYT) petitions, which request tariff adjustments based on sent-out data, aligning KE with mechanisms applied to other XWDiscos.

Monthly Fuel Charge Adjustment

In addition to the winter package, Nepra has approved a Rs1.14 per unit reduction in the October monthly fuel charges adjustment. This adjustment, initially proposed at Rs1.01 per unit by the Central Power Purchasing Agency (CPPA-G), was finalized following a public hearing on November 26.

The reduction applies to all XWDisco consumers except lifeline customers, prepaid users, and electric vehicle charging stations. However, KE customers are excluded from this adjustment.

These measures aim to provide temporary financial relief to electricity consumers while maintaining a balanced approach to tariff adjustments.