Fuel adjustment: NEPRA slashes power tariff by Rs2.83

Reduced rates not be applicable to agricultural, K-Electric consumers

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) on Tuesday approved cut in power tariff by Rs2.83 per unit on account of monthly fuel price adjustment for the month of March. The benefit of lowered tariff will reach consumers in the next billing month.

The decision was taken at a public hearing which was presided over by Nepra Chairman Brig (retd) Tariq Sadozai on the request of the Central Power Purchasing Agency (CPPA), which had asked the authority to pass on the impact of lower international oil prices to consumers.

The reduced rates will not be applicable to agricultural and domestic consumers using less than 300 units per month. Likewise, consumers of the Karachi based power utility, K-Electric, will also not be able to benefit from this relief.



Highlighting that the actual electricity cost stood at Rs5.3122 per unit against reference tariff of Rs8.098, the CPPA had sought a cut in tariff by Rs2.78 per unit for March. Nepra, however, disallowed Rs255 million unapproved fuel price of Nandipur Power Plant, resulting in overall price cut of Rs2.83 per unit.

Sadozai expressed serious concern over utilisation of expensive power plants based on regasified liquefied gas (RLNG) despite availability of cheaper plants.

Nepra also disallowed Rs65 million claimed by the CPPA as expenses on account of power generation by Thermal Power Station Quetta at Rs8.60 per unit. Nepra chairman observed that utilisation of the Quetta plant was illegal in the absence of a generation licence.

He said it was strange that the CPPA and the National Transmission and Dispatch Company (NTDC) filed written undertakings with all expenses billed to consumers and yet the cost of an illegal plant had been built into the tariff.

“This is a very serious issue and can attract registration of a case,” said Sadozai.

The CPPA reported that furnace oil based power generation cost stood at Rs5.13 per unit compared to gas based power generation cost of Rs5.86 per unit and diesel based power generation cost of Rs11.64 per unit. Rs1.15 per unit was the cost of generation through nuclear plants while cost of electricity imported from Iran stood at Rs10.6 per unit.

The CPPA reported that a total of 6.7 billion units of electricity were supplied to distribution companies in March. The hydropower contributed to about 27.55 per cent while furnace oil based plants generated over 29.5 per cent of the needed energy. Gas based plants generated 33 per cent electricity for the national grid followed by 6.52 per cent of nuclear and 0.18 per cent by diesel plants.

Published in The Express Tribune, April 27^th,  2016.