Fuel adjustment: Power tariff cut by nearly Rs3 per unit

Lifeline, K-Electric consumers exempted from relief

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) on Friday slashed power tariff by Rs2.97 per unit on account of fuel adjustment for the month of November. The tariff cut would reflect in bills of January, but lifeline and K-electric consumers would be exempted from this relief.

Nepra took the decision during a public hearing chaired by Brig (retd) Tariq Saddozai held on Friday. It was informed that consumers using up to 100 units a month would save Rs292 per month.



The government has slashed power tariff by taking some cosmetic measures to improve energy mix which include zero use of High Speed Diesel (HSD), decrease in use of furnace oil, maintaining gas prices and increase in water supplies from dams.

Another measure was curtailment of power production which resulted in lower generation cost but an increase in duration and frequency of load-shedding for consumers. According to officials, 1.2 billion less units were produced during the month of November compared to the corresponding period last year, resulting in a 4-hour extra load-shedding.

During the hearing, it was informed that 10% less power was generated through furnace oil, while no electricity was produced by expensive HSD in November. It was also informed that 7% additional hydel power was generated compared to the same period last year.

It was informed that Nepra had assumed that the gas price would go up to Rs625 per mmbtu for power generation but it remained at Rs573 per mmbtu. “Due to putting gas prices on hold, consumers would be having a relief of Rs3.50 billion,” Nepra was informed.

Officials of the Central Power Purchasing Agency (CPPA) said that the total impact of fuel reduction cost was Rs8.167 billion as Rs4.470 billion in furnace oil, Rs95 million HSD and Rs3.56 billion gas.

“An amount of Rs11 billion was saved due to better energy mix,” the CPPA officials said, adding that the use of HSD in power plants was zero. An amount of Rs10.5 billion was saved due to less use of furnace oil. The cost of furnace oil was Rs66,913 per metric ton in the beginning of November which dropped to Rs56,925 per metric ton.

The regulator was informed that reference fuel cost was Rs7.4167 per unit whereas actual cost was down to Rs4.4495 per unit registering a cut of Rs2.9672 per unit. After hearing, the regulator decided to cut power rate by Rs2.97 per unit.

The Nepra chairman observed that consumers would be enjoying an accumulative reduction of Rs3.50 per unit cut in two months – October and November.

Published in The Express Tribune, December 20^th, 2014.