Fuel price adjustment: Power consumers to receive Rs3.2 per unit relief

NEPRA likely to cut tariff in a hearing set for January 29.

ISLAMABAD:

Domestic power consumers are set to receive a major relief of Rs3.20 per unit in electricity tariff on account of fuel price adjustment for December 2014.

The Central Power Purchase Agency (CPPA) has sought a Rs3.20 per unit reduction in power rates from the National Electric Power Regulatory Authority (Nepra) for all distribution companies (except K-Electric) because of the cheaper cost of fuel for power generation.

Admitting the CPPA’s tariff petition, Nepra has decided to hold a public hearing before passing on to the consumers a cumulative relief of around Rs20 billion in the upcoming billing month. Lifeline consumers who use 50 units a month will not enjoy the relief.



In its petition on behalf of all distribution companies, the CPPA explained that the average fuel cost during the month of December 2014 stood at Rs6.32 per unit against the reference fuel cost of Rs9.53 per unit, which was earlier fixed by Nepra. This reduced the generation cost by Rs3.21 per unit.

The CPPA reported to the regulator that 6.57 billion units were sold to the distribution companies during December 2014. A reduction in the cost of furnace oil and diesel led to the reduction in power generation cost in that month, it said.

During December, power generation through furnace oil cost Rs12.38 per unit, high-speed diesel cost Rs19 per unit, coal Rs4.49 per unit, gas Rs3.57 per unit and nuclear power Rs1.18 per unit. Also, imported electricity from Iran came at Rs10.20 per unit.

Nepra officials said the regulator had been cutting electricity tariffs under monthly fuel price adjustments for the past four months due to the weakening international oil prices. This was on the request of CPPA on behalf of distribution companies.

They added power consumers of all companies, except K-Electric, will receive around Rs20 billion in relief in their monthly bills. Nepra will hold a public hearing on January 29 to finalise the decision in this regard.

Under various acts of parliament, Nepra is required to pass on the actual impact of fuel cost to the consumers every month irrespective of the consideration of any increase or decrease in tariff.

The officials added the public hearing would examine the proof and actual invoices to be provided by the CPPA for the reduction in tariff.

Published in The Express Tribune, January 27^th,  2015.

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