Nepra notifies consumers of Rs1.11 per unit higher fuel costs in Oct billing

The National Electric Power Regulatory Authority (Nepra) has informed consumers that their October electricity bills will include an additional charge of Rs1.11 per unit to cover higher fuel costs. This decision, announced by Nepra, means that the "positive fuel cost adjustment (FCA) for August 2026" will apply to all consumer categories of K-Electric and ex-Wapda distribution companies (XWDISCOs), excluding lifeline consumers, electric vehicle charging stations, and prepaid electricity customers.

The increase is due to the actual average fuel charges component for August 2026, which was Rs8.8265/kWh, compared to the reference fuel charges component of Rs7.0998/kWh initially approved. Nepra's calculation of the actual fuel component of the tariff came to Rs8.2084/kWh, rather than the initially claimed Rs8.8265/kWh. This additional FCA of Rs1.11 per unit is lower than the Rs1.73 per unit initially demanded by the Central Power Purchasing Agency (CPPA).

The higher fuel costs were attributed to expensive RLNG imports from the spot market, force majeure situations affecting Qatar's contracted fuel supplies, and lower-than-estimated availability of hydropower and nuclear power. Hydropower's share of total generation was about 38%, slightly below the planned 41%, while nuclear power's share was 10%, down from the estimated 16.4%. Consequently, imported coal-based generation increased to 15.6% of total generation, up from the originally planned 7.4%.

The cost of hydropower, which has no fuel cost, remained unchanged, while nuclear fuel cost increased to Rs3.15 per unit due to reduced utilization. Imported coal-based generation cost Rs17 per unit, higher than the Rs5.5 per unit for local coal-based generation and the Rs45.93 per unit for RLNG-based generation, which is also more expensive than furnace oil-based power generation, factoring in a petroleum levy. The FCA is reviewed monthly and typically applied to one month's consumer bills.