NEPRA increases power tariff by Rs7.9 per unit

Also approves massive hike of Rs9.52 per unit for K-Electric consumers

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) has notified an increase of Rs7.90 per unit in power tariff on account of fuel cost adjustment for May 2022.

The notification came in response to the request from the Central Power Purchasing Agency-Guarantee (CPPA-G) for a tariff increase of Rs7.96 per unit. The power sector regulator held a public hearing on June 27.

Earlier in April, the consumers were charged Rs3.99 per unit on account of fuel cost adjustment, which was applied for one month only, Nepra said. “Now, the consumers will be charged Rs3.91 per unit more in July.”

It would apply to the customers of all distribution companies (DISCOs) except for lifeline consumers. It would not apply to the K-Electric consumers, the regulator said.

Separately, Nepra approved a massive increase of Rs9.52 per unit in the tariff for K-Electric consumers. However, the power utility “will collect it from the customers in two months,” Nepra said in a notification.

K-Electric consumers will be charged Rs2.63 per unit in July and Rs6.89 per unit in August under the fuel cost adjustment.

The company had requested for a tariff increase of Rs11.34 per unit, the notification said.

The regulator held a public hearing to consider K-Electric’s petition on July 4. The tariff revision would only apply to the July and August bills, the notification said. “This will apply to all K-Electric customers except for lifeline consumers.”

According to a notification issued for DISCOs, Nepra, after observing the data provided by CPPA-G, noted that the fuel cost of power plants had been claimed as per the authority’s approved rates.

According to the data, the ex-Wapda DISCOs purchased 16.769 gigawatt-hours (GWh) of electricity from the captive power plants in May 2022. The actual fuel cost of this energy was Rs78.594 million.

During the hearing, the regulator observed that the costlier furnace oil (RFO) and high-speed diesel (HSD) based power plants generated energy to the tune of over Rs43,452 million and Rs857 million respectively in May 2022.

Nepra has been directing the National Power Control Centre (NPCC), National Transmission and Despatch Company (NTDC) and CPPA-G repeatedly to provide complete justification in this regard and submit complete details of deviation from the economic merit order (EMO), showing hourly generation along with the financial impact of deviation from the EMO.

During the hearing, NPCC/ NTDC explained the operation of power plants on RFO. However, the regulator observed that an in-house analysis had also been carried out to work out the financial impact due to the deviation from EMO based on the information submitted by NPCC.

As per the in-house analysis, the net amount deductible, on a provisional basis, from the overall claim due to the deviation from EMO was Rs796 million.

The regulator worked out a financial impact of Rs794.61 million due to system constraints and Rs1.4 million due to the underutilisation of efficient power plants.

It decided to deduct the amount provisionally from the fuel cost adjustment, until the NPCC/ NTDC and CPPA-G provided the required details along with complete justification to the satisfaction of the authority.

NTDC reported provisional transmission and distribution losses of 323.345 GWh, ie 2.42%, based on the energy delivered to the NTDC system in May.

Published in The Express Tribune, July 8^th, 2022.

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