NEPRA to slash power tariff by Rs2.77

Price reduction will not apply to K-Electric, agricultural consumers


Zafar Bhutta October 28, 2016
Price reduction will not apply to K-Electric, agricultural consumers. PHOTO: FILE

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday announced a reduction of Rs2.77 per unit in electricity tariff for September 2016 in order to absorb the impact of cheaper fuel prices in the international market.

After the tariff cut, the consumers will get an overall relief of Rs20 billion in their electricity bills. However, the K-Electric and agricultural consumers as well as domestic users, who consume less than 300 units of electricity per month, will not be enjoying the tariff reduction.

Earlier, the Central Power Purchasing Agency (CPPA) in a petition requested Nepra to slash power tariff by Rs2.7609 per unit for the month of September.  Responding to the request, Nepra decided to cut the tariff by Rs2.77 per unit in a public hearing chaired by Nepra Chairman Tariq Sadozai.



According to Nepra, the fuel cost of electricity supplied to distribution companies was 3.6718 per unit in September compared to the reference price of Rs6.3426 per unit, suggesting that the consumers were entitled to a price reduction of Rs2.7609 per unit.

As the power distribution companies have recovered an extra Rs20 billion through electricity bills for September, the amount will be returned to the consumers after the regulator’s decision. Total energy generated in the country from all sources stood at 10,220.09 gigawatt-hours (GWh) in September at a cost of Rs36.26 billion.

The CPPA supplied 10,034.66 GWh to the distribution companies at the total price of Rs36.844 billion. Power companies, however, faced a net loss of 175.09 GWh, constituting 1.71% of the total energy supplied.

In September, hydroelectric power generation was recorded at 4,209.50 GWh, accounting for 41.19% of the total electricity produced in the country. The electricity generated through furnace oil was 25.9% while natural gas helped to produce 21.85%.

The power generated with the help of furnace oil cost Rs7.57 per unit while gas-fired electricity cost Rs5.23 per unit. Power companies generated 0.99% of the total power by using high-speed diesel (HSD) at a cost of Rs12.32 per unit.

The power regulator also took notice of the artificial load-shedding in the country. Nepra chairman said 49% power plants were kept closed in the month of September, resulting in power outages.

He questioned why load-shedding was enforced to add to the miseries of the power consumers despite having a power generation capacity.

Sadozai also pointed out that expensive power plants were operated to produce expensive power during month of September. “Rs6 billion loss resulted from closing power plants which could generate cheaper electricity,” he said.

It was pointed out that the HSD based power plants were operated to generate electricity at cost of Rs12 per unit; whereas furnace oil and gas based plants were kept shut.

The regulator sought a reply from power ministry and the National Transmission and Dispatch Company (NTDC) for generating expensive power. The NTDC chief engineer argued that it was policy of the government to implement 6-8 hours load shedding in the country.

Nepra chief also raised questions over not issuing notification regarding power generation by Nandipur power plant.

Published in The Express Tribune, October 28th, 2016.

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