Power tariff comes down by Rs1.9 per unit

Consumers expected to receive a refund of Rs20 billion

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday endorsed a tariff reduction of Rs1.90 per unit for consumers of state-owned power distribution companies for May 2017 under the monthly fuel price adjustment mechanism.



However, the tariff cut, under which Rs20 billion are expected to be refunded to the consumers, will not be applicable to K-Electric and agricultural consumers and those domestic users who consume up to 300 units of electricity per month.

Nepra made the tariff announcement at a public hearing, presided over by its Chairman Brigadier (Retired) Tariq Sadozai and attended by officials of the regulator, the Central Power Purchasing Agency-Guarantee (CPPA-G) and National Power Control Centre, which is tasked with ensuring the merit order of power plants.

According to data provided to the regulator, actual fuel charges for May 2017 came in at Rs4.8807 per unit of electricity compared to the reference fuel price of Rs6.7764 per unit, showing a difference of Rs1.8957 per unit.

In May, total power generation was estimated at 11,024 gigawatt-hours (GWh) and the CPPA-G delivered 10,888 GWh, which constituted 98.70% of total production.

The total cost of net electricity supply to the distribution companies stood at Rs53.105 billion. Consequently, the impact of refund to the consumers is expected to be Rs20 billion.

Power transmission losses were calculated at 122.8 GWh, which comprised 1.11% of total generation and substantially less than the ceiling of 3% set by the regulator.

“The actual power generation cost stood lower, hence, extra money collected from the consumers need to be refunded through adjustment in the next billing month under the automatic fuel pass-through mechanism,” the CPPA said. In May, hydroelectric power generation contributed 3,326 GWh, which constituted 30.17% of total generation and had no fuel cost.

It was followed by 30% share for electricity produced through residual fuel oil at a price of Rs9.4 per unit. The total cost of electricity generated from this source came in at Rs31 billion.

Natural gas-fired power generation contributed 1,944 GWh or 17.64% of total generation at a cost of Rs8.630 billion or Rs4.4378 per unit.

High-speed diesel-based power projects generated 406.5 GWh or 3.69% of total production at a cost of Rs5.981 billion or Rs14.7 per unit.

Coal-fired power plants produced 237 GWh, which constituted 2.15% of total generation and its cost was calculated at Rs26.13 million or Rs0.1102 per unit.



Power generation from re-gasified liquefied natural gas (RLNG) plants was estimated at 857.3 GWh at a cost of Rs7.11 per unit. Total cost amounted to Rs6 billion. Nuclear power cost Rs1.04 per unit, electricity import from Iran cost Rs10.6 per unit and bagasse-based power cost Rs5.98 per unit.

Published in The Express Tribune, June 21^st, 2017.

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