The National Electric Power Regulatory Authority (Nepra) on Monday notified an increase of Rs0.48 per unit in power tariff on account of fuel cost adjustment for the month of August.
The reference fuel price was Rs3.2045 per kilowatt-hour (kWh). However, the actual price came in at Rs3.6873 per kWh, an increase of Rs0.4828. The increase will be applicable to all consumer categories except for lifeline consumers of ex-Wapda distribution companies.
The said adjustment shall be shown separately in consumers’ bills on the basis of units billed in August 2020 by the ex-Wapda distribution companies. They will reflect the adjustment of fuel charges for August 2020 in the billing month of November 2020.
The Central Power Purchasing Agency-Guarantee (CPPA-G) had said in a petition that the actual fuel cost for August 2020 was Rs4.1891/kWh against the reference fuel cost of Rs3.2045.
It claimed that the actual fuel charges for August 2020 increased Rs0.9846 per kWh compared to the reference fuel charges.
CPPA-G claimed an amount of Rs229 million on account of previous adjustments and negative supplemental charges of Rs1.73 million during August 2020.
As per the data submitted by CPPA-G, the distribution companies purchased 20.259 gigawatt-hours (GWh) from captive power plants during August. According to details provided by CPPA-G, the actual fuel cost was Rs134.737 million.
The amount claimed by CPPA-G included the impact of gas infrastructure development cess (GIDC) on gas prices despite the restriction placed by the Supreme Court on the recovery of GDIC after July 30, 2020.
Therefore, Nepra excluded the impact of GIDC from the instant cost of captive power plants. Accordingly, the total cost for captive power plants was worked out as Rs99.860 million. The same was considered while working out fuel cost adjustment for August 2020.
During the hearing, the power sector regulator also observed that, prima facie, certain efficient power plants were not fully utilised and instead energy from costlier residual furnace oil (RFO) and high-speed diesel (HSD)-based power plants was generated to the tune of Rs11.594 billion (Rs9.7 billion from RFO and Rs1.9 billion from HSD) during August 2020. The authority noted had the energy been generated from cheaper sources like RLNG or coal, it would have resulted in reduction in the total fuel cost.
The authority has been directing NPCC/ NTDC and CPPA-G repeatedly to provide complete justification in this regard and submit details of power generation from RFO/ HSD with hourly generation along with the financial impact for deviation from the economic merit order, if any, and the reasons, thereof.
Though the details were provided by NPCC/ NTDC, Nepra also conducted an in-house analysis in this regard. As per working of the regulator, the additional impact of RFO/ HSD plants is around Rs6.655 billion. Nepra decided to not allow the said amount in the instant fuel cost adjustment till further details of generation were submitted to the satisfaction of the authority. The amount being withheld would be considered once the NPCC/ NTDC and CPPA-G provide the required details.
The authority, after incorporating the aforementioned adjustments, allowed the fuel cost, including the cost arising due to application of various factors as provided in the respective power purchase agreement (PPAs) of power producers and claimed by CPPA-G in its monthly fuel cost adjustments.
According to data provided to Nepra, the energy generation in August 2020 was recorded at 14,630.06 GWh. Total cost of energy amounted to Rs59.81 billion. Total electricity sold to distribution companies was 14,199.19 GWh for Rs59.482 billion. Total transmission losses during August rose to 2.95% from 1.88% in July. Hydropower generation contributed the highest share of 37.39% or 5,469.55 GWh to the overall generation during August. Coal-based power plants contributed 17.30% or 2,530.30 GWh. The cost of coal-based electricity was Rs6.0317 per unit.
In August, 97.76 GWh of expensive electricity from HSD was generated at Rs19.4315 per unit. From furnace oil, 5.42% or 792.38 GWh of electricity was generated and the cost was Rs12.2343 per unit.
Published in The Express Tribune, November 10th, 2020.
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