ISLAMABAD, Nov 29: The National Electric Power Regulatory Authority questioned on Thursday the legality of various power purchase agreements which determined the final cost of electricity, and withheld a notification for a 4 paisa per unit increase in the tariff of Wapda’s distribution companies.

At a public hearing for fuel-based monthly adjustment in tariff for Wapda consumers, Nepra members also questioned high transmission losses and said it would notify the tariff increase only when it was provided with power purchase agreements.

Presided over by Nepra Member from Sindh, Mr Habibullah Khilji, the power regulatory authority called for production of record to suggest how much expenditure had been made to reduce the claimed transmission losses and its impact.

Nepra was concerned that it had allowed transmission losses at 2.5 per cent under which 210 million lost units were to be recovered from consumers but actual losses stood at 286 million units.

Nepra also questioned an allowance of Rs595 million on account of payments to Kot Addu Thermal Power Company as price differential liability on account of higher cost of Low Sulphur Fuel oil (LSO) instead of High Sulphur Fuel Oil. Nepra member from Khyber Pakhtunkhwa Shaukat Kundi said the actual agreement with Kapco was for HSFO and there was no legal cover for LSFO to be passed on to consumers.

A representative of the Central Power Purchase Agency (CPPA) said that Wapda had requested the water and power ministry not to include the Kapco’s fuel price differential in the monthly fuel-based tariff adjustment but its request had been rejected.

Mr Kundi said that Nepra had not approved the power purchase agreement with Kapco and hence it would not allow the fuel price differential in the consumer tariff. He also said the CPPA had not entered into a formal power purchase agreement with distribution companies and hence the sale and purchase of electricity was not covered by law.

He said he had already written a dissenting note on these agreements. He challenged the CPPA to contest his dissenting notes in a court and he would prove that the entire business was going on illegally. He observed that if the National Accountability Bureau or any court of law took up the matter for investigation, all top functionaries would be in difficult situation because these agreements were neither transparent nor in the interest of consumers.

Nepra also objected to the continuous absence of chief executive officer of CPPA from public hearings and warned that it would take stern action if he did not turn up at the next hearing.

The regulator worked out an increase of 4 paisa per unit in monthly fuel charges but said it would announce its judgement and notify new rates after the Islamabad High Court disposed of a case against tariff adjustments.