The National Electric Power Regulatory Authority (Nepra) indicated on Tuesday that it would reduce power tariff by Rs10.80 per unit for K-Electric (KE) consumers and by Rs2.32 per unit for the consumers of other power distribution companies (DISCOs) on account of fuel charge adjustment (FCA) for December 2022.
The tariff reduction will reflect in the electricity bills of February 2023 where consumers will receive a relief of Rs18.7 billion.
The power-sector regulator conducted separate public hearings to review the petitions of KE and other DISCOs, which sought a reduction in electricity tariff.
KE submitted its petition for a tariff cut of Rs10.26 per unit while the Central Power Purchasing Agency-Guarantee (CPPA-G) requested a tariff reduction of Rs2.20 per unit. During the hearings, the regulator announced that the tariff would be slashed by Rs10.80 per unit for KE consumers and by Rs2.23 per unit for DISCOs’ customers. However, “final decision will be issued later”.
In a statement, Nepra said that the public hearings were presided over by its Chairman Engineer Tauseef H Farooqui.
According to the analysis of preliminary data, according to Nepra, the tariff reduction would be Rs2.32 per unit for DISCOs. Earlier, their consumers were charged an increase of 18 paisa per unit on account of FCA for November.
DISCOs would charge consumers Rs2.50 per unit less than in November under the December FCA, which would be applicable for one month, it said.
It will not apply to lifeline consumers, domestic consumers using up to 300 units, agricultural customers and electric vehicle charging stations. It will also not apply to KE consumers. The authority will issue a detailed decision after further scrutiny of data.
During the hearings, National Transmission and Despatch Company (NTDC) authorities came under fire for lack of planning and inefficiencies because of delay in establishing a network for power transmission from Thar coal projects. It was informed that Thar coal-based power plants with 2,400-megawatt production capacity had been completed. However, NTDC was able to evacuate only 1,800MW, causing a loss of Rs587.6 million.
It was emphasised that the loss should either be borne by NTDC or the regulator would have to shift it on to consumers.
Nepra gave NTDC a deadline of three days, asking the company to explain why it failed to draw up proper plans for power transmission from Thar. Those projects were developed on a “take-or-pay” basis, therefore, NTDC would have to pay the cost if it was unable to evacuate power, it said.
“Who is responsible for the loss due to the failure to lay a power transmission network,” questioned Nepra chairman. High salaries of NTDC employees also came up for review as despite the high remuneration, their performance had been poor, evident from the recent blackout in the country. Nepra chairman announced that inquiries were being held to know about the reasons for the blackout.
In the case of KE, Nepra’s data analysis suggested that tariff reduction under the December FCA should be Rs10.80 per unit.
Earlier, the KE tariff was slashed by Rs7.43 per unit on account of FCA for November 2022. It was applicable for one month only. December FCA will be Rs3.37 per unit less than November’s tariff.
The lower tariff, which would be applicable for one month, would provide a relief of Rs12 billion for KE customers, announced Nepra.
During the hearing, it was informed that furnace oil consumption in KE’s power plants dropped, which was a major reason for the reduction in electricity price.
Nepra called on KE to install wind and solar power plants in Jhimpir where the relevant infrastructure was already in place. Responding to that, KE officials said they were focusing on renewable energy and had submitted the Request for Proposal (RFP) to Nepra for wind power projects.
Published in The Express Tribune, February 1st, 2023.
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