What Is Fc Surcharge In Electricity Bill?

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) approved the federal government to re-impose three fees on electricity consumers on Wednesday, in accordance with a pledge it made with the International Monetary Fund (IMF).

The three fees, totaling Rs1.55 per unit, would be levied on users who pay their bills on a regular basis to offset the cost of Rs110 billion in theft, system losses, and power company non-recovery.

While approving the surcharges, the regulator stated that it was bound by law to do so because the federal government had decided to do so under section 31(5) of the Nepra statute, but that the previous tariff would stay unchanged.

The Neelum-Jhelum Surcharge, at a rate of 10 paisa per unit, aims to earn roughly Rs7.5 billion per year, and the Financing Cost Surcharge, at a cost of 43 paisa per unit, aims to secure collection of Rs30-32 billion for Power Holding Private Limited debt servicing.

The Tariff Rationalisation Surcharge, which is paid at an average cost of Rs1.02 per unit, is intended to minimize overall power subsidy on the budget while maintaining tariff uniformity across the country through cross-subsidy. This will vary by distribution business and produce around Rs70 billion per year.

The regulator confirmed that the Lahore High Court had declared these surcharges unconstitutional on May 29, 2015, but that the decision had been appealed by the federal government in the Supreme Court of Pakistan, and that the high court’s decision had been put on hold. Similar cases against surcharges were also ongoing before high courts in Khyber Pakhtunkhwa, Islamabad, Balochistan, and Sindh, but the distribution corporations would have to implement court orders because they were parties before the relevant high courts.

The regulator, when discussing the benefits and drawbacks of levying surcharges, stated that “Nepra has not imposed any such surcharges; instead, the federal government has the legal authority to do so. For the sake of recovery, Nepra has merely been asked to specify the amount of such surcharges imposed by the government in the tariff schedule….

The federal government has the ability to levy any fee under section 31(5) of the Nepra Act, 1997, and any such surcharge was to be deemed a cost to be included in the rate calculated by Nepra, according to the regulator.

Nonetheless, the regulator stated that, notwithstanding the government’s capabilities, revenue deficits are the result of distribution businesses’ incapacity to recover the specified tariff. “Because the Discos are unable to recover the full amount, the Financing Cost Surcharge is a hardship on paying customers. According to Nepra, this also encourages Discos to underperform.

The regulator stated that interveners and impacted groups should take their concerns about the surcharges to the federal government for resolution.

The retention of the three fees, according to an official, would not raise the existing rate, but would deprive customers of a legal tariff reduction set by the regulator during the previous two years.

How can I save money on power in Pakistan?

“What are some ways to preserve electricity? in addition “What are some strategies for conserving electricity throughout the summer? are some of the most often asked questions over the summer.

Paint Your Roof White

In Pakistan, summers bring unjustified extended periods of load shedding. Painting your roof white is one of the most efficient strategies to survive load shedding. The indoor climate of your home is cooled when your roof reflects sunlight. Your roof will generate an oven effect by restricting heat from entering the home if it is coated in black tar. This, of course, means that there will be more heat on the inside.

If your house’s roof receives direct sunlight, you’ll have to run the air conditioner for longer to get the ideal temperature. Painting the roof white has been shown to reflect roughly 90% of sunlight and reduce consequent heat, balancing the internal and outside temperatures. This also implies that you may not require an air conditioner to keep your room cool. The temperature inside your home will progressively drop due to the air current. In Pakistan, the average cost of keeping a roof cool is PKR 15PKR 35 per sq ft.

“On a bigger scale, a research estimates that every 1,000 square feet (92 square meters) of roofs painted white can offset 10 tonnes of carbon dioxide emissions,” according to an article in DAWN. So, if we painted 2500km2 of rooftops in Karachi (estimated covered area), we would be taking 2,242,480 cars off the road for 20 years.

Unplug the Devices That Are Not In Use

Turning off equipment that are not in use is another excellent technique to save money on your electricity bill throughout the summer. You should not only turn off, but also disconnect your television. After each use, unplug any charger, electronic device, computer, or appliance. Despite the fact that this information is commonly known, few people use it. Apart from laziness, one of the key reasons is that unplugging devices only saves individuals roughly PKR 100 to PKR 500. Consider it this way: you’re paying extra for something you’re not even using. Even if we can afford to pay the additional sum, we must keep in mind that our resources are limited.

Inspect Devices that Consume More Energy

Engage the services of a local electrician to come to your home and assess which areas of the house consume the most energy and why. People who have lived in the same residence for a long time are more likely to neglect replacing old wiring or restoring rusted sockets. These small yet crucial electrical devices use a lot of power. Fix the leaks if you want your home to be more energy efficient. This method will save you money and lower your electricity bills.

Use Appliances During Off-Peak Hours

A timetable can be found on your electricity bill. The time windows when the meter runs normally and when it runs faster are indicated in this table. You should aim to use the hours when the meter is running at a typical rate. During these hours, you should not use heavy machines like the washing machine, iron, or vacuum cleaner. During this time, charge your appliances.

Choose Your Air Conditioner Wisely

When purchasing an air conditioner, be sure to make an informed decision. The machine you select should be the most appropriate for your space. It is a frequent misconception that a large air conditioner will cool the space faster. The right-sized air conditioner for your room will keep you cool while also saving you money on your electricity bill. Buildings in Pakistan are typically not insulated. In addition, the summer season lasts for more than half of the year. As a result, choosing the correct air conditioner will help you save money on your electricity expenses. Before purchasing anything, do extensive research to determine which brand and size is ideal for you.

Machines that Consume More Electricity

There are some machines that use more power than their counterparts. Laptops, for example, require roughly 50 watts of power, whereas energy-efficient desktops use around 100 watts. The monitor consumes an additional 50 watts of electricity. Laptops are so preferred over desktop computers at work and at home due to their reduced power consumption. Similarly, top-loading washing machines use more energy than front-loading washers. Also, when purchasing an appliance, we should consider more than just the purchase price. We should also think about the appliance’s lifecycle expenses. The total cost of ownership includes the purchase price of the item as well as the cost of electricity or fuel to operate it. It also includes the price of upkeep.

Aside from these energy-saving methods, you can also put a solar panel in your home. Solar panels capture the sun’s energy and convert it to electricity. As a result, you can switch your house’s system to solar panel mode during peak hours. Check out how to install solar panels on your home for additional information.

Meanwhile, here are a few additional resources you might find useful:

  • How to Avoid Heatstroke in Pakistan During Heatwaves
  • On a hot summer day, how do you keep your kitchen cool?
  • How to Get Rid of Trapped Heat in Your Home and Make It Feel Cool
  • To Beat The Heat This Summer, Here Are Some Drinks

What is the definition of a fixed cost in an electricity bill?

Let’s start with two simple questions: how much does energy cost to create, and what is the cheapest technology for doing so? We’ll try to answer these questions in this chapter. These solutions will turn out to be more complicated than you might think.

Electricity generation, like other commercial items, necessitates the use of land, labor, raw materials, and money, all of which have an inherent cost of production. Electricity generated by a coal-based power plant, for example, necessitates the building of the coal power plant, for which an investor may incur the costs of land, equipment, construction, grid connection, financing, and project management. In addition, there are additional costs associated with operating a power plant, such as the cost of coal burned and operating expenses, such as labor costs. While the actual prices of power generation vary depending on the technology utilized, we can develop a broad understanding of energy generation costs.

Fixed and variable costs of generation

All generation costs can be divided into two types based on when they are incurred: when making an investment decision or when making a production decision. Fixed or investment costs are those incurred only at the time of generation, whereas variable or generation costs are those incurred only at the time of generation.

The cost of equipment, land, funding, project management, grid connection, and power plant building are all fixed costs. These are usually represented in terms of installed capacity per unit of capacity (per kW or per MW). Fixed costs are considered sunk costs since they cannot be recovered once the facility is built and fixed costs are incurred. Although the plant may be sold or dismantled at some point, the proceeds are usually minimal.

Fuel prices, operating and maintenance costs, and carbon dioxide emission charges, if applicable, are all examples of variable costs. They’re usually calculated per kilowatt-hour of electricity produced (per MWh). Only variable costs come into play when deciding whether or not to employ an existing plant to generate power. Fixed expenses are irrelevant to this manufacturing choice since they are sunk costs. In the case of an investment decision, however, both fixed and variable costs are important, as we will see later.

Costs that are almost fixed. Staff can be hired or fired after the investment decision at discrete periods in time, but not for every single production decision, which falls into a third category between fixed and variable costs, commonly referred to as quasi-fixed costs. In the case of power generation, such quasi-fixed costs are insignificant enough to be absorbed into variable expenses.

The cost structure of generation technologies is shown below. The cost structure of electricity producing methods varies substantially. Nuclear, wind, and solar power plants, for example, have essentially no variable costs: once built, they supply electricity almost for free. This is in sharp contrast to power plants that use fossil fuels. Variable expenses (fuel costs and emission charges, for example) account for roughly 40% of the total costs of a coal-fired power plant and up to 60% of the total costs of a gas-fired combined cycle plant. In general, technologies with low CO2 emissions, which tend to be ones that do not utilize fuel, have a greater percentage of overall expenditures made up of fixed costs.

Figure 1 shows the cost structure of several electricity producing systems (illustrative)

The cost of generating electricity from certain technologies (wind, solar, nuclear) consists virtually entirely of investment expenses, whereas the cost of generating electricity from others (coal, gas) consists primarily of variable costs.

Annualized Fixed Costs

The majority of power plants are planned to last between 20 and 60 years (also called the technical lifetime of a power plant). Even if fixed costs are incurred at the time of investment, it makes appropriate to translate fixed costs into annualized terms for analytical purposes, i.e. calculate the cost of constructing the station per year of its technical lifespan. Annualized Fixed Costs (AFC) or similar annual cost is the term for this statistic. The AFC is determined by turning fixed costs into annuities at the moment of investment using the following formula:

where AFC represents the annualized fixed cost in EUR per kW per year, Cfix represents the fixed costs in EUR per kW, r represents the discount rate, and Y represents the power plant’s technical lifetime in years. As a result, AFC are based on the real cost of establishing a facility as well as its estimated technical lifetime, both of which are heavily influenced by engineering and manufacturing processes. On the other hand, the discount rate is a financial notion.

The discount rate is a figure that is used to determine how much money The weighted average cost of capital, or simply WACC, is the most often used discount rate for computing annualized fixed expenses (we use the terms WACC and cost of capital interchangeably). WACC is computed as share of equity – times cost of equity – plus share of debt – times cost of debt for a power plant (or any other investment). The cost of capital is employed in discounting because it indicates the opportunity cost of the money invested in the power plant: cost of equity is the lost return on an alternative investment, while cost of debt is the interest rate paid.

1 kWh is equal to how many units?

What is the definition of an electrical unit? One kilowatt-hour is one unit of electricity. It is the amount of energy required to run a 1000 watt appliance for one hour.

In Pakistan, how much does one unit of energy cost?

The National Electric Power Regulatory Authority (Nepra) has approved an increase in power pricing of Rs7.91 per unit.

The one-unit price of electricity has increased from Rs16.91 to Rs24.82 as a result of the new raise. The hike has been reported to the federal government by Nepra. According to a statement, the increased tariffs will take effect after the government issues its final notification.

The rise in tariffs has been attributed to the rupee’s depreciation and increased oil prices on the foreign market.

Nepra has set the national average tariff for the financial year 2022-23 at Rs24.82 per unit, up Rs7.91 from the previous average tariff.

According to the statement, the government determines the new tariff based on distribution and transmission losses, as well as revenue generated by various distribution companies.

The International Monetary Fund (IMF) had declared a day before that “Pakistan has to adopt broad-based efforts to restore macroeconomic stability,” implying that the program’s revival would not be easy, despite the government’s intention to raise fuel prices by 25%.

She cited the elimination of fuel and energy subsidies, as well as the fiscal year 2022-23 budget, as areas that must be addressed in order to “repair the damaged economy and meet the Extended Fund Facility (EFF) program objectives.”

“It will be critical to achieve the program’s objectives to implement a package of comprehensive steps, including the withdrawal of fuel and energy subsidies and the FY2023 budget,” Perez stated.

The IMF also stated that an agreement might not be reached until Pakistan takes additional actions, such as achieving an agreement with the IMF on tax ideas and the budget framework for the coming fiscal year.

Esther described recent talks with Pakistan as “quite positive,” adding that talks with Pakistani officials are still ongoing. Pakistan and the IMF convened in Doha, Qatar, from May 18 to 25, but were unable to reach an agreement at the staff level.

The envoy was cited as stating, “The IMF looks forward to supporting review progress by continuing communication and close engagement with Pakistan’s government.”

How can I save money on my power bill?

Why is my monthly electricity payment so high? If living in self-quarantine has made you realize how much electricity you’ve been wasting on lights, there are a number of easy steps you may take to reduce your electric cost. Today, we’ll show you how to save money on your electricity bill in five different methods.

1. Switch out incandescent lamps for LEDs.

CFLs and old filament bulbs both use a lot of electricity. Not only will your electricity bill be reduced if you replace them with LED bulbs, but the amount of light produced will also be doubled. In terms of numbers, a 100-watt filament bulb uses one unit of electricity every ten hours. A 15 watt CFL, on the other hand, uses one unit of electricity in 66.5 hours. A 9-watt LED, on the other hand, will use one unit of electricity after 111 hours.

2. When purchasing electric items, keep the rating in mind.

When purchasing electronic appliances like as refrigerators and air conditioners, careful attention should be paid to the rating. Always strive to purchase equipment that has a 5-star rating. These products have a high initial cost, but the electricity bill is quite low, and their worth is repaid over a lengthy period of use.

3. When you’re finished, remember to switch off the appliance.

How can I slow down the speed of my electric meter?

Using less electricity is the most effective approach to slow down the meter. There are checks and balances in place, and if you get caught (not if, but when), it will cost you a lot of money.

What is the formula for calculating fixed charges?

The fixed-charge coverage ratio divides total interest and lease expenses by the sum of lease payments and profits before income and taxes (EBIT).

Why is it necessary to have set charges on an electricity bill?

These are flat-rate electricity costs that remain constant regardless of how much electricity you use. Your monthly electricity bills include this amount. The purpose of fixed charges is to recoup the fundamental cost of electric service. They take into consideration your electricity provider’s investment in equipment like transformers, cables, and poles, as well as labor, in order to provide members with dependable and safe electric service.

What is the difference between a fixed fee and a charge that is based on energy?

The Fixed Charge is used to recoup the fundamental cost of electric service, regardless of the amount of energy consumed. It is a charge for the use of Electric’s equipment, such as poles, wires, and transformers, as well as personnel, to provide members with safe and dependable electric service. Energy charges are used to recover energy utilized, whereas fixed charges are used to recover the basic costs of electric service and infrastructure used by consumers, or we can say indirectly rent for using the electrical company’s wires and poles.

The fixed charge is determined by the sanctioned load. The larger the load sanctioned fixed fee, the higher it will be.