Rs3.93 electric shock for Karachiites

NEPRA jacks up K-E tariff on account of FCA for March this year

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) on Thursday notified a Rs3.93 per unit increase in the power tariff for K-Electric consumers on account of fuel cost adjustment (FCA) for the month of March 2023.

K-Electric had sought an increase of Rs4.49 per unit. The Nepra decision would reflect in the power bill of May 2023. The power regulator noted that a power purchase agreement was signed between the National Transmission and Despatch Company (NTDC) and K-Electric on January 26, 2010 for five years for the sale or buying of 650MW on basket rates.

Subsequently, a decision was made by the Council of Common Interests (CCI) in its meeting on November 8, 2012 in connection with the modalities for the withdrawal of electricity from the NTDCL by the petitioner, wherein it was decided to reduce the supply of energy by 300MW from the company to K-Electric.

However, the decision of the CCI had been impugned by the way of suits and petitions by K-Electric in the Sindh High Court in Karachi.

Read more: K-Electric power tariff up by 58 paisas

No new agreement had been signed between K-Electric and the NTDCL till date.

K-Electric was continuing to draw energy from the national grid, which at present was around 1,100MW.

The city’s power utility, in its adjustment requests, had certified that it despatched as per economic merit order from its own generation units -- with the available fuel resources -- and import from external sources.

It also certified that the cost of fuel and power purchase claims did not include any amount of late payment surcharge, mark-up or interest.

Tanveer Barry, a commentator, raised concerns about the high FCAs during the summer of 2023.

K-Electric responded that with the inclusion of Bin Qasim Power Station 3 (BQPS-III), the overall generation cost would reduce.

Imran Shahid, another commentator, submitted that K-Electric should not be operating inefficient plants, which had outlived their lives and were resulting in higher generation cost.

K-Electric, while responding to the comments, maintained that it had improved its overall generation fleet efficiency to 48% over the last 15 years.

It claimed that BQPS-I unit 1 and unit 2 would be decommissioned after three months and units 5 and 6 would only be operated if they fell in the economic merit order to meet the load requirement.

While going through the information provided by K-Electric about the fuel cost from its own power plants, the power regulator observed that the cost of BQPS-III had been worked out using an auxiliary of 2.047% based on higher heating value (HHV) combined cycle efficiency of 6,381 British thermal unit (BTU) per kilowatt hour (kWh) at 100% load.

This resulted in a total cost of Rs5,543.23 million for the operation of BQPS-III on re-gasified liquefied natural gas (RLNG) in the current month and that was accordingly being allowed.

The cost was being allowed strictly on a provisional basis, subject to final determination of price, etc.

The power regulator observed that K-Electric was being directed to provide CV test reports for two power plants.

K-Electric submitted CV test report of Tapal and Gul Ahmed from the Hydrocarbon Development Institute of Pakistan (HDIP) and SGS laboratories to Nepra.

It used the average of the two reports in the FCA request.

The authority had considered the higher of the two CVs, which resulted in negative adjustment of Rs748,353 and Rs1,799,057 for Tapal and Gul Ahmed power plants, respectively.

On the cost of energy purchased from the Central Power Purchasing Agency-Guarantee (CPPA-G) during the current month, K-Electric used the rate of Rs9.8860 per kWh.

However, the authority’s approved fuel cost component, in the matter of XWDISCOs for the current month, was Rs9.5039/kWh.

K-Electric had claimed a negative impact of Rs.242.43 million on account of billing correction made by the Sui Southern Gas Company (SSGC) in connection with the quota of indigenous gas and the RLNG delivered during the month of February 2023.

The power regulator adjusted the cost in the decision. It said any further adjustment on that account would be made subsequently.

The power regulator carried out an in-house analysis of the data provided by K-Electric for the month to work out the financial impact because of the deviation from the economic merit order..

About the financial impact because of the underutilisation of efficient plants, including the Korangi Combined Cycle Power Plant (KCCP), Korangi Gas Engine Power Station (KGTPS) and Site Gas Engine Power Station (SGTPS) on account of low gas pressure, a letter was issued to K-Electric on September 16, 2021.

It was directed to resolve its low gas pressure and quantity issues within 30 days.

In response, K-Electric informed the regulator that it was in the process of resolving the low gas pressure issue. However, it added that certain meetings with stakeholders would take place in due course of time.

As of now, no gas supply agreement had been finalised between K-Electric and the SSGC despite the directions of the authority.

Furthermore, an amount of Rs1.42 million had been provisionally withheld for out-of-merit despatch given to Lotte on March 15 and 16, 2023.