WEBDESK: Consumers should prepare for higher electricity prices this summer as the government, on Thursday, warns of increased reliance on costly imported fuels due to low water availability for hydro-power.
During a public hearing on Thursday, on Rs2 per unit negative fuel cost adjustment (FCA) for electricity consumed in January, officials confirmed that declining hydro-power production would push power generation costs up. The National Electric Power Regulatory Authority (NEPRA) raised concerns over how summer demand will be met and whether higher electricity prices will be applicable, given the lower than usual rain and snowfall throughout the winters.
NEPRA Chairman Waseem Mukhtar asked about the plan to meet the summer demand given fewer rain and snowfalls throughout winter and whether higher electricity prices will be applicable.
Senior management officials from the National Power Control Centre (NPCC) told NEPRA that water levels in reservoirs are below expectations, meaning less electricity will be generated from hydropower plants. To cover the shortage, the country would need to depend more on imported regasified liquefied natural gas (RLNG), which is more expensive than hydro-power. This would result in higher electricity prices for consumers.
NEPRA invited the Water and Power Development Authority (WAPDA) chairman for a detailed briefing on hydropower availability in the coming months.
The hearing was told that power demand was 4.4pc lower than what was projected for January, while it was about 2pc lower compared to January last year.
Cumulatively, a 3.3pc decrease was reported in the first seven months of 2024-25. Significant reductions were witnessed in electricity consumption in the industrial and agriculture sectors.
Central Power Purchasing Agency’s Rehan Akhtar attributed the decline in agriculture to the shifting of tubewells to solar power, and the reduction in industrial sector consumption had other underlying factors, as evident from the fall in industrial output.
Meanwhile, the government has proposed offering relief through a negative fuel cost adjustment (FCA) for domestic consumers using less than 300 units per month and agricultural users.
January’s electricity consumption was already lower than projected, with industrial and agricultural sectors seeing a drop in usage. Experts say rising solar adoption and economic slowdowns have contributed to this decline.
Despite this decline, the ongoing reliance on imported fuel means higher electricity prices are likely in the summer.
Earlier in another verdict, NEPRA had imposed a fine of Rs10 million on the National Transmission and Dispatch Company (NTDC) due to its negligence in maintenance work that resulted in accidents.
NEPRA also ordered compensation for the affected employees and their families. It said failure to adhere to safety protocols was a violation of the NEPRA Act. The accidents raised serious concerns about NTDC’s performance and capabilities, it added.
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