NEPRA notifies increase in power tariff

Tariff rises by Rs1.51 per unit under fuel price adjustment formula۔

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has issued a notification for increase in power tariff by Rs1.51 per unit on account of fuel price adjustment charges for the month of May.

In this connection, power distribution companies will recover Rs45 billion from the consumers in the billing month of December.

The tariff rose following a petition filed by the Central Power Purchasing Agency (CPPA), in which it pleaded for a tariff increase of Rs1.52 per unit to recover the cost of fuel for May. CPPA pointed out that the actual fuel cost for thermal power production in the month stood at Rs8.06 per unit compared to the reference fuel price of Rs6.54 per unit, requiring a tariff hike.

CPPA also said the price of furnace oil rose to Rs72,000 per ton in May compared to the reference price of Rs65,000 per ton.

It was also highlighted in the petition that out of total electricity sold to the power distribution companies in May, a major chunk of 34.46% was produced through furnace oil while gas-powered thermal production had a share of 28.2%.

Hydropower contributed 29.16% to total production while nuclear power had a share of 5.82%, coal 1.04% and diesel-based production 1.07%. The electricity, imported from Iran, accounted for 1.43% of the total power sold in May.

In a dissenting note with the tariff decision, Nepra member from Khyber-Pakhtunkhwa Shaukat Ali Kundi expressed serious reservations about the tariff hike, saying state-run power companies were producing expensive electricity.

He pointed out that the power companies had not installed such meters, which could stop theft of furnace oil at power plants. He further said the power companies were not following directives of Nepra and as a result, consumers were forced to bear the burden on account of increase in tariff.

“Public sector power companies are generating 1,500 megawatts, but they are receiving capacity charges for 2,766MW. Owing to this, the consumers are paying Rs3.10 billion per annum,” he noted.

Published in The Express Tribune, July 12^th, 2012.