NEPRA indicates Rs2.51 tariff hike

Power consumers are likely to face a tariff increase of Rs2.51 per unit on account of fuel cost adjustment for September 2021. The National Electric Power Regulatory Authority (Nepra) has indicated such a tariff hike for the power distribution companies.

At the hearing of a petition filed by the Central Power Purchasing AgencyGuarantee (CPPA-G) on Wednesday, the regulator noted an additional burden of Rs2.07 billion due to the violation of merit order. Similarly, there was a burden of Rs1.1 billion because of shortage of liquefied natural gas (LNG), a Nepra official told participants of the hearing. The hearing was conducted to consider a tariff increase of Rs2.66 per unit under the fuel cost adjustment for September 2021.

In the petition submitted to Nepra on behalf of power distribution companies, the CPPA-G said that in September the reference fuel cost for the consumers was Rs5.0229 per unit while the actual fuel cost came in at Rs7.6816 per unit. Therefore, it should be allowed to pass on the increase of Rs2.6587 to the consumers. If approved, the tariff increase will have an impact of Rs37 billion on the power consumers. During the hearing, Nepra was told that in September, the supply of LNG stood at 660 million cubic feet per day (mmcfd) against demand for 950 mmcfd.

Nepra Chairman Tauseef Farooqi inquired why the use of furnace oil increased for power generation in September. An official of the National Power Construction Corporation (NPCC) replied that electricity demand had increased during the month and some plants were facing outages. Power Secretary Ali Raza Bhutta stated that demand for electricity increased 7% in September. “There are hurdles in the supply of LNG,” he pointed out.

“The impediments cannot be removed until new terminals are established.” Nepra vice chairman stated that problems were being faced in the supply of LNG for the past eight to 10 months and asked why advance planning had not been done for fuel supply. Nepra has reserved its judgement, which it will announce later. CPPA-G said that the total energy generated during September was calculated at 14,031.89 gigawatt-hours (GWh) at a cost of Rs95.361 billion.

The generation was lower than August production of 16,078.09 GWh. The cost of energy came in at Rs6.7960 per unit. According to the CPPA-G data, the net electricity delivered to the distribution companies was 13,629.91 GWh at a cost of Rs104.699 billion or Rs7.6816 per unit. Hydel power generation was recorded at 5,085 GWh against generation of 5,594.30 GWh in August. The share of hydel generation stood at 36.24%.

On the other hand, the share of coal in power generation increased from 2,293.83 GWh (14.27%) in August to 2,392 GWh (17.05%) in September. The cost of coal generation was estimated at Rs10.0809 per unit. Power generation from high-speed diesel decreased from 19.84 GWh (0.12%) in August to just 2.34 GWh (0.02%) in September. The cost of electricity generated from high-speed diesel stood at Rs21.7417 per unit. The electricity generated from furnace oil during September stood at 997.44 GWh (7.11%) at a cost of Rs19.2323 per unit.

Electricity generation from gas-based power plants was 1,248.28 GWh (8.9%) against August generation of 1,313.21 GWh, at Rs8.3329 per unit. RLNG contributed 2,651 GWh (18.9%) in September against generation of 2,895.92 GWh in August, at Rs14.9104 per unit, which was higher than the previous month’s generation cost of Rs13.4401 per unit. Generation by nuclear power plants decreased from 1,630.19 GWh in August to 1,281.80 GWh (9.13%) in September at Rs0.9813 per unit.Electricity imports from Iran stood at 48.27 GWh (0.34%) at Rs13.1146 per unit.

Power generation from bagasse was recorded at 16.48 GWh at Rs5.9819 per unit. Power generation from different sources (mixed) came in at 16.18 GWh at a price of Rs4.6382 per unit, while wind power generation was recorded at 230.40 GWh, or 1.64%, and solar power generation was calculated at 60.75 GWh, or 0.43%