ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday directed the power distribution companies of Water and Power Development Authority (Wapda) to refund about 60 per cent of fuel cost overcharged from consumers for February.

At a public hearing presided over by its Chairman Tariq Sadozai, Nepra approved the highest ever Rs4.36 per unit (60pc) cut in electricity rates for all the public-sector distribution companies for one month to pass on the impact of lower international oil prices to consumers.

The reduced rates would not be applicable to all agricultural and domestic consumers using less than 300 units per month under a decision of the PML-N government that this was already a subsidised segment of population.

Utilisation of expensive RLNG power plants “is financial crime”, says Nepra official

Likewise, consumers of K-Electric would also not benefit from this relief.

The Central Power Purchasing Agency (CPPA) had solicited Rs3.63 per unit reduction in fuel-based power tariff for February, saying the actual cost stood at Rs3.624 against reference tariff of Rs7.26.

To the displeasure of power sector officials, Nepra concluded the fuel cost of ex-Wapda distribution companies at about Rs2.90 per unit in February against Rs7.26 per unit charged to consumers under a pre-determined reference price. Therefore, a relief of Rs4.36 per unit was allowed in the average monthly fuel price adjustment (FPA). The benefit of lower tariff would reach consumers in the next billing month.

Mr Sadozai, a retired brigadier, and Nepra’s member tariff Khwaja Mohammad Naeem expressed serious concern over utilisation of expensive power plants on re-gasified liquefied gas (RLNG) despite availability of cheaper plants. “This is financial crime,” said Khwaja Naeem as Nepra ordered legal action against the CPPA and National Transmission and Despatch Company (NTDC) in this regard.

Nepra also disallowed Rs4.5 billion claimed by the CPPA for expenses on account of Nandipur Power Project, saying the plant’s final tariff had already been approved and hence additional amounts allowed needed to be adjusted. Nepra had also rejected this charge last month.

Nepra’s Punjab member Khwaja Naeem said the CPPA had committed financial crime by running some expensive plants to benefit selective individuals in the presence of cheaper plants. He said the CPPA did not have the powers to change merit order of the power plants.

“How could board members change the merit order?” he wondered, adding that the power plants producing energy at Rs4.50 per unit were partially run to ensure that RLNG-based plants having Rs8.30 per unit fuel cost and high-speed diesel based plants involving Rs11.78 per unit cost could be accommodated. “This is a serious injustice with the consumers who were compelled to bear billions of rupees worth of additional burden, which could not be tolerated,” he went on to add.

Nepra Chairman Sadozai also observed that furnace oil-based plants involving Rs5.25 per unit cost should have been given preference over Rs8.30 per unit cost of RLNG-based plants. He said load-shedding was being carried out in the country but power plants having cheaper energy cost were not utilised to their capacity.

General Manager Mohammad Ilyas did not agree with such observations. He said there was no interest for CPPA to run one or another power plant and all the power plants were run on merit order.

Complying with the previous Nepra orders, the CPPA/NTDC also agreed to give real-time access to the regulator regarding power generation data through a password. The CPPA/NTDC had stopped supplying direct power generation data to the regulator in November 2015.

The CPPA reported that furnace oil-based power generation cost stood at Rs5.25 per unit compared to gas-based generation costing Rs6.04 per unit and Rs11.78 for diesel-based plants, no fuel cost for hydropower plants and Rs1.15 per unit of nuclear plants. The fuel cost of electricity imported from Iran stood at Rs10.6 per unit.

The CPPA reported that a total of 6.2 billion units of electricity were supplied to distribution companies in February. It said the hydropower generation contributed about 34.6pc while furnace oil-based plants generated over 33pc energy. Gas-based plants generated 22.8pc electricity for the national grid followed by 6.32pc of nuclear and 0.5pc by diesel plants.

Published in Dawn, March 30th, 2016