Dec 2016: NEPRA slashes power tariff by Rs2.21 per unit

CPPA had sought a lower reduction, but the regulator did not accept the request

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has decided to cut electricity tariff by Rs2.21 per unit for December 2016 in a bid to pass the impact of cheaper imported fuel prices on to consumers of state-owned power distribution companies.

However, K-Electric and agricultural consumers as well as domestic users that consume less than 300 units a month will not be enjoying the tariff relief. According to the government, these consumers are already subsidised.



In its petition, the Central Power Purchasing Agency (CPPA) had requested Nepra - the power sector regulator - to slash the tariff by Rs1.85 per unit.

However, in the monthly public hearing on the fuel cost adjustment on Thursday, the regulator decided to reduce the tariff by Rs2.21 per unit.

The CPPA sought fuel cost adjustment of Rs4.5 billion for the Guddu power plant, but Nepra disagreed, saying according to its calculation, the impact was Rs2.2 billion. It did not accept that adjustment, which resulted in a reduction of Rs2.21 in the tariff.

The fall in the actual power generation cost came mainly in the wake of weaker global crude oil prices and a better energy mix.

The CPPA said the actual generation cost stood lower in December 2016 and hence extra money collected from the consumers needed to be refunded in the next billing month under the automatic fuel cost pass-through mechanism.



K-Electric

In a stark contrast, K-Electric, which serves power consumers in Karachi, had sought a tariff increase of 40 paisa per unit.

Company officials argued during the public hearing that they had to operate power plants on furnace oil because of unavailability of gas.

The regulator expressed concern over the increase requested by the company. However, it allowed a provisional tariff increase of 40 paisa per unit and constituted a committee to probe why K-Electric ran its plants on furnace oil.