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Costly power buying by govt burdens end users

Updated October 29, 2015

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LAHORE: In violation of its own policy the government is buying expensive electricity from the most fuel-inefficient power producers since July, adding to the financial woes of power consumers.

The National Transmission and Despatch Company (NTDC), according to rules, is bound to purchase power from power producers which generate electricity at the lowest cost.

However, the violation of this rule is not only costing power consumers billions in the shape of inflated monthly bills but also the country in the form of import of expensive oil for generation.

They power cost had two components — capacity price that the government pays to producers for making their plants available to the NTDC and energy price which is fuel cost and portion of O&M.

Also read: Call for use of Thar coal in power projects

Sources in the power industry told Dawn on Wednesday that the government had not posted the fortnightly merit of order, a list of the power producers according to their cost of production with the cheapest topping it.

A chief executive of an independent power producer said the statement of generation for August showed that Kot Addu-1 with dependable capacity of 325MW was the 3rd most utilised plant as per the NTDC despatch instructions, despite having merit order rank of 53 according to the list posted in the beginning of July.

Similarly, Engro Power with dependable capacity of 213MW was the 7th most utilised plant operating at 87pc of its capacity despite having merit order rank of 57.

Liberty Power with dependable capacity of 196MW utilised its 86pc capacity and ranked 8th in NTDC despatch instructions despite being placed at 38th position on merit order.

Similarly, Roush and Attock were given despatch instructions priority of 1st and 6th — 98pc and 88pc capacity utilisation respectively) despite having merit order ranks of 10 and 26.

Liberty Power on the other hand with dependable capacity of 212MW and merit order rank of 2 has been given lower priority with only 85pc capacity utilisation.

Similarly, the Uch-2 power plant with dependable capacity of 388MW has been ranked 4th in merit order but it is placed at number 9 in the priority list and being utilised to only 86pc of its capacity factor.

Genco Guddu CC 5-10 with dependable capacity of 530MW has been placed among the last in the priority list despite having merit order rank of 14, said the chief executive, adding that only 5pc capacity of the plant is being utilised.

He said the current despatch instructions are clearly against the goal of the National Power Policy 2013, which is to ensure the generation of inexpensive and affordable electricity for domestic, commercial and industrial use.

Published in Dawn, October 29th, 2015

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