National Electric Power Regulatory Authority (Nepra) on Friday approved a reduction in power tariff by Rs4.12 per unit for consumers of K-Electric (KE) on account of fuel cost adjustment for July 2022.
KE had filed a petition to cut the power tariff by Rs3.48 per unit for July. Earlier, Nepra had allowed KE to charge an additional Rs11.10 per unit from consumers on account of fuel cost adjustment for June.
Nepra said that KE would charge Rs15.22 per unit less tariff under fuel cost adjustment in July compared to June 2022.
It, however, stated that the reduction in tariff for July would be applicable for one month only and to all consumers of KE except for lifeline users.
The power sector regulator conducted a public hearing on August 31. During the hearing, the issues raised pertained to whether the requested fuel price variation was justified and whether KE had followed the merit order while giving dispatch to its power plants as well as power purchases from external sources.
KE, in its FCA request, had submitted that calculation for July 2022 was based on Central Power Purchasing Agency-Guarantee (CPPA-G)’s requested fuel cost component for the month. This was subject to adjustment based on the determination of XWDISCOs’ FCA for July 2022 by Nepra.
The regulator noted that the power purchase agreement was signed between National Transmission and Despatch Company (NTDC) and KE on January 26, 2010 for five years for the sale/ purchase of 650 megawatts at basket rates.
Subsequently, a decision was made by the Council of Common Interests (CCI) in its meeting held on November 8, 2012 with respect to the modalities for withdrawal of electric power from NTDC by the petitioner. During the meeting, it was decided to reduce the supply of energy to KE by 300MW.
However, the decision of the CCI has been impugned by way of petitions filed by KE in the Sindh High Court in Karachi. No new agreement has been signed between KE and NTDC to date and meanwhile KE continues to draw energy from the national grid.
KE, in its adjustment requests, certified that it despatches as per economic merit order from its own generation units (with the available fuel resources) and imports from external sources. It also certified that the cost of fuel and power purchase claims do not include any amount of late payment surcharge or interest.
KE provided the plant-wise generation statistics sheet, except for BQPS-III. In addition, KE also provided copies of invoices raised by fuel suppliers and copies of invoices raised by independent power producers (IPPs).
The power regulator directed KE to ensure submission of BQPS-III generation data sheets for previous months as well as for future period along with its subsequent monthly FCA requests.
KE submitted that during July 2022, it received indigenous gas supply of 10 mmcfd out of the total gas quota. This quota was fully utilised at BQPS-II as per its availability and limitation of available gas pressure and only excess gas supply was diverted to BQPS-I due to limitation of gas pressure at KPC, SGTPS and KGTPS plants.
Moreover, Sui Southern Gas Company (SSGC) increased its gas supply to KE during Eid holidays from July 8 to July 12, up to 200 mmcfd. During these days, BQPS-II was fully utilised as per its availability and additional gas supply was diverted to remaining plants as per EMO, subject to availability of gas pressure.
On the issue of fully utilising available LNG in BQPS-III, KE submitted that it is getting RLNG from two sources including SSGC and PLL.
SSGC provides gas to KE for power plants other than BQPS-III and SSGC gas cannot be consumed at BQPS-III for which PLL supply has been dedicated.
As per the agreement, in case KE is unable to take the delivery of gas, PLL shall make reasonable efforts to sell such gas to third parties and adjust the cost charged to KE on a net proceeds basis as recovered from the alternative buyer.
Published in The Express Tribune, September 10th, 2022.
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