The National Electric Power Regulatory Authority (Nepra) has allowed ex-Wapda distribution companies an increase of Rs4.3 per unit in power tariff on account of monthly fuel cost adjustment (FCA).
The authority, after incorporating various adjustments, reviewed and assessed an increase of Rs4.3 per kilowatt-hour (kWh) in the applicable tariff of power distribution companies on account of variations in fuel charges for November 2021, said a statement issued by Nepra on Thursday.
The decision will place a burden of Rs41 billion on electricity consumers.
The increase shall be applicable to all consumer categories except for lifeline consumers and the distribution companies shall reflect the fuel charges adjustment for November 2021 in the billing month of January 2022, according to the decision.
Nepra conducted a public hearing on the petition of Central Power Purchasing Agency-Guarantee Limited (CPPA-G) for a tariff increase of Rs4.3329 per unit on account of monthly FCA for November 2021.
In the petition submitted on behalf of power distribution companies, the CPPA-G stated that in November reference fuel charges for consumers were Rs3.7381 per unit while the actual fuel cost came in at Rs8.071 per unit.
Therefore, it requested for permission to pass on the increase of Rs4.3329 per unit to the consumers.
In its decision, the authority observed that CPPA-G purchased 36.692 gigawatt-hours (GWh) of energy from Tavanir (Iran) in November 2021 at a cost of Rs483.4 million.
The authority also observed that CPPA-G had filed a request for the approval of extension of contract between CPPA-G and Tavanir for import of up to 104MW of power from January 1, 2020 to December 31, 2021, which was under consideration of the authority.
Keeping that in view, the cost of electricity being purchased from Tavanir is being allowed strictly on a provisional basis, subject to its adjustment once the authority decides on the extension in the contract between CPPA-G and Tavanir.
It is being allowed on a provisional basis to avoid the piling up of cost and one-time burdening of consumers in future.
CPPA-G also claimed an amount of Rs13.6 billion on account of previous adjustments in the FCA for November 2021. The same was verified as Rs13.4 billion and accordingly included in the monthly FCA for November 2021.
Regarding adjustment of Uch-Il, CPPA-G claimed an amount of Rs6.21 billion for the period November 2013 to December 2019 owing to a revision in wellhead gas prices by the Oil and Gas Regulatory Authority (Ogra).
On the directives of the authority, CPPA-G provided verified invoices for the relevant period, whereby, the amount claimed was revised to Rs6.03 billion.
However, after verification by the authority regarding energy and power purchase agreements based on data provided by CPPA-G, the amount of previous adjustments was calculated at Rs5.96 billion, which was included in the monthly FCA for November 2021.
As per data submitted by CPPA-G, ex-Wapda distribution companies purchased 11.83 GWh from captive power plants in November 2021. In this regard, the CPPA-G provided actual details of energy purchased from these plants.
The actual fuel cost of energy supplied by the captive power plants was Rs52.795 million. As per Nepra’s approved mechanism, the same price was considered while working out the FCA for November 2021.
It was noted that around 145.40 GWh was generated from furnace oil and 24.99 GWh was produced using high-speed diesel during November 2021.
The capacities of re-gasified liquefied natural gas, coal and gas-based efficient power plants were underutilised.
The net amount deductible, on a provisional basis, from the overall claim due to deviation from the economic merit order and owing to the underutilisation of efficient power plants was calculated at around Rs6.4 million.
The authority decided to deduct this amount provisionally from the instant fuel cost adjustment, until NPCC/ NTDC and CPPA-G provided required details along with complete justification to the satisfaction of the authority.
Published in The Express Tribune, January 14th, 2022.
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