NEPRA reserves tariff hike decision
TRIBUNE CREATIVE
The National Electric Power Regulatory Authority (Nepra) on Wednesday reserved its decision on a petition of power distribution companies seeking permission to recover extra fuel charges from consumers.
As per routine, every month the Central Power Purchasing Agency (CPPA), on behalf of power distribution companies, submits details of electricity sale and purchase to the regulatory authority, which then holds a public hearing. After this, Nepra gives its ruling on fuel cost adjustment for each month.
On Wednesday, Nepra held a public hearing on the CPPA petition that sought upward revision in tariff for two months (October and November 2020).
The agency pleaded that the power distribution companies may be allowed to charge an extra Rs0.5712 per unit from consumers for October and another Rs0.9582 per unit for November in their next electricity bills. It argued that the cost of power generation was high while it sold electricity at a lower price to the consumers. It sought a two-month combined tariff increase of Rs1.5294 per unit.
After assessing the statistics given by the CPPA regarding electricity purchased from power producers and its sale to the consumers, Nepra came to the conclusion that the hike of Rs1.06 per unit shall be justified (Rs0.29 per unit for October and Rs0.77 per unit for November). It will have a combined impact of Rs8.4 billion, which would be collected from the power consumers.
A Nepra official said that they had calculated the increase, which was most probably allowed to the distribution companies. “We have taken no decision on the matter, however, we will issue our final decision in a few days.”
The regulator again expressed concern over the use of furnace oil for power generation. The CPPA informed the regulator that they had deducted around Rs15 billion for furnace oil-based power generation. It also suggested that if the government did not want to run furnace oil-based power plants, then it should take them out of the economic merit order and close them once and for all.
In October, against the demand for 650 million cubic feet of gas per day (mmcfd), 627 mmcfd was supplied to the power plants. Owing to shortage of liquefied natural gas (LNG), plants were run on furnace oil.
A National Transmission and Despatch Company (NTDC) official said that they either let the furnace oil-based plants to run or allow power outages in the country.
Responding to that, Nepra vice chairman said that they were not in support of load-shedding as it would affect domestic, commercial and industrial consumers.
Published in The Express Tribune, December 31st, 2020.
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