NEPRA may allow up to Rs2 hike in tariff

Increase to be made under fuel cost adjustment for August 2021

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) is likely to allow distribution companies an increase of up to Rs2 per unit in power tariff under the monthly fuel cost adjustment (FCA) for August 2021.

At a public hearing on Central Power Purchasing Agency-Guarantee’s (CPPA) petition for tariff increase under the monthly FCA, Nepra questioned as to why power plants with low efficiency rates were operated during August.

In the petition, CPPA-G said that for August the reference fuel charges for consumers were Rs4.7334 per unit while the actual fuel cost came in at Rs6.8053 per unit, therefore it should be allowed to pass the increase of Rs2.0718 on to consumers.

Nepra questioned as to why an extra Rs10 billion was spent on power generation from furnace oil in August. It was told that power plants received 300mmcfd less gas than their demand.

The Nepra chairman said that the regulator would not put the burden of those power plants that were operated on expensive fuel. “Why doesn’t CPPA provide us with the data we ask for?”

The authority noted that they could allow a tariff increase of Rs1.95 to Rs2 per unit, which would burden the power consumers with an additional Rs30 billion to Rs35 billion.

As per the data submitted by CPPA-G, the total energy generated during August stood at 16,078.09 gigawatt-hours (GWh) at a basket price of Rs6.4122 per unit. The total cost of electricity was Rs103.097 billion.

According to the CPPA-G data, the net electricity delivered to distribution companies was calculated at 15,590.87 GWh with total price of Rs106.100 billion at a rate of Rs6.8053 per unit.

Hydel generation was recorded at 5,594.30 GWh, or 34.79% of the total. Coal-fired power plants contributed 2,293.83 GWh, or 14.27% of the total generation, at a rate of Rs9.0322 per unit and high-speed diesel contributed 19.84 GWh, or 0.12%, at Rs22.6251 per unit.

RFO-based generation stood at 1,627.56 GWh, or 10.12%, at Rs18.2403 per unit.

Electricity generation from gas-based power plants was calculated at 1,313.21 GWh, or 8.17%, at Rs8.3082 per unit and RLNG plants contributed 2,895.92 GWh, or 18.01%, at Rs13.4401 per unit.

Nuclear power plants generated 1,630.19 GWh, or 10.14%, at Rs0.9986 per unit while 45.24 GWh of electricity was imported from Iran at Rs12.36 per unit.

Power generation from baggasse was recorded at 24.06 GWh at Rs5.9822 per unit. Power generation from different sources (mixed) contributed 16.98 GWh at a price of Rs4.6705 per unit, while wind power was recorded at 549.95 GWh, or 3.42%, and solar power generation stood at 67.01 GWh, or 0.42%.

Overbilling issue

Nepra on Thursday directed the distribution companies to take action against officials involved in overbilling as it was proved that a majority of the distribution companies charged their consumers over and above 30 days of billing cycle.

Read NEPRA reserves decision on K-Electric tariff petition

At a public hearing presided over by Nepra Chairman Tauseef H Farooqi, it was disclosed that Multan Electric Power Company (Mepco) even charged a bill for 52 days in monthly bills for consumers in Rahim Yar Khan.

It was noted that Mepco took the lead in penalising the consumers with higher electricity bills by charging monthly bills based on 35 to 52 days.

Mepco admitted to the overbilling during the public hearing.

The Nepra chairman said that overbilling had deprived consumers of the benefit of tariff slabs. “How will that benefit be returned to the consumers?” he asked.

The Mepco CEO responded that he was investigating it while Nepra called for a report on the matter. Mepco admitted it had billed for 35 days.

It was informed that a total of 64 complaints of overbilling were received from various distribution companies.

The hearing raised the issue of overbilling for more than 31 days by the electricity distribution companies, including K-Electric.

Nepra Vice Chairman Rafiq Sheikh asked whether the overbilling was intentional or due to technical issues, adding that whatever the problem was, why did the companies not inform about the issue.

The Lahore Electric Supply Company CEO said that it could not be called overbilling. The Nepra chairman responded, “Don’t challenge it, there was overbilling.”

“We have to look after the interest of consumers,” he said.

K-Electric Chief Financial Officer Aamir Ghaziani said that the company makes adjustment in next month’s bills if there is any issue of overbilling.

“It is difficult to go to some areas due to Muharram procession,” he said, adding that K-Electric did not deliberately overbill. He said that consumers of K-Electric were billed for 34 days.

Nepra vice chairman said that the regulator would announce a comprehensive decision on overbilling.

Published in The Express Tribune, October 1^st, 2021.

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