DISCOs’ tariff slashed by Rs0.32 per unit for Oct

It comes under fuel cost adjustment with total relief of Rs3.3 billion for consumers

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) on Saturday notified a tariff reduction of Rs0.32 per unit for the ex-Wapda power distribution companies (DISCOs) on account of fuel cost adjustment for October 2022.

The electricity price reduction will be applicable to all consumer categories except for lifeline consumers using up to 50 units, domestic consumers consuming up to 300 units, electric vehicle charging stations and agriculture consumers of ex-Water and Power Development Authority (Wapda) DISCOs. It will also be applicable to the domestic consumers having Time of Use (ToU) meters irrespective of their consumption levels. The tariff cut, which will be shown separately in consumer bills, will provide a total relief of Rs3.3 billion to the consumers.

“DISCOs shall reflect the fuel charges adjustment (FCA) in respect of October 2022 in the billing month of December 2022,” the power sector regulator said in a notification. It noted that the Central Power Purchasing Agency-Guarantee (CPPA-G) purchased 47.77 gigawatt hours (GWh) of electricity from Iran’s Tavanir in October at a cost of Rs1,012 million.

However, the contract between CPPA-G and Tavanir for import of up to 104 megawatts had expired on December 31, 2021. Therefore, Nepra allowed the cost of electricity purchase from Tavanir strictly on a provisional basis, subject to adjustment once the authority decided the extension in contract. It was done in order “to avoid the piling up of cost and burdening the consumers in future”.

CPPA-G also claimed an amount of Rs2,241 million in previous adjustments in the FCA for October 2022.

Regarding the adjustment of Rs17 million for Genco-Ill, CPPA-G clarified that the adjustment was on account of partial load pertaining to the previous periods. Since the claim required some technical verification, the regulator did not consider it and waited for completion of the verification. The adjustment for Uch-Il plant covering the period from April 2014 to May 2016, claimed by CPPA-G in the FCA for August 2022, was considered based on the energy and other technical factors verified by Nepra. The amount was calculated at Rs84 million and incorporated into the instant FCA.

Similarly, Nepra verified the invoice of Quaid-e-Azam Thermal Power Plant (QATPL) for July 2022, which included energy numbers and the associated hourly load. It resulted in a deduction of Rs28.8 million from the amount already allowed to QATPL and it was adjusted in the instant FCA. Furthermore, while determining the FCA for August 2022, an error had been noted in the adjustment whose impact was calculated at Rs167 million. It was adjusted back in the instant FCA.

For the remaining previous adjustments, claims were verified and considered while working out the instant monthly FCA. According to the data submitted by CPPA-G, DISCOs purchased 14.769 GWh from the captive power plants in October 2022. The actual fuel cost of energy came in at Rs67.898 million, which was considered while working out the FCA for October 2022.

The national average purchase price stood at Rs19.32 per kilowatt hour (kWh) as per the tariff notified with effect from July 25, 2022. During the hearing, Nepra observed that energy to the tune of Rs5,276.78 million was generated by the costlier residual fuel oil (RFO)-based power plants in October. In this regard, the regulator has repeatedly sought complete justification. It noted that CPPA-G had provided the required data and information along with the monthly FCA for October. However, it was not as per requirements of the regulatory authority.

Consequently, CPPA-G was directed to submit the report as per the desired format. Nepra said that an in-house analysis had also been carried out to work out the financial impact of deviation from the economic merit order (EMO) based on the information submitted by the National Power Control Centre (NPCC).

According to the analysis, the net amount deductible, on a provisional basis, from the overall claim due to deviation from the merit order was Rs43.79 million.

Of this, the financial impact of Rs36.10 million was due to system constraints and Rs7.69 million was because of underutilisation of the efficient power plants.

The regulatory authority decided to deduct the amount provisionally from the instant FCA until NPCC and CPPA-G provided the required details along with complete justification to the satisfaction of the authority.

National Transmission and Despatch Company (NTDC) reported provisional transmission and transformation (T&T) losses of 264.096 GWh (2.36%), based on the energy delivered to its system, in October 2022. In addition to that, it reported T&T losses of 27.31 GWh (2.56%) suffered by Pak Matiari Lahore Transmission Company’s (HVDC) line.

Published in The Express Tribune, December 18^th, 2022.

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