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Electricity price cut by Rs3.60

Updated December 28, 2016

ISLAMABAD: Electricity rates have been lowered by Rs3.60 per unit by the National Electric Power Regulatory Authority (Nepra) as power producers managed to generate cheaper electricity in November.

However, K-Electric consumers will be charged an additional amount of Rs0.60 on each unit consumed as the power utility had to use furnace oil for producing power amid short supply of gas.

The decision was made on Tuesday at a public hearing by Nepra regarding monthly fuel-price adjustment.

The petition for monthly fuel-price adjustments is filed by the Central Power Purchasing Agency (CPPA), the government agency that buys electricity from the Water and Power Development Authority, generation companies and the independent power producers, and sells it to the power distribution companies (Discos).

The petition was seconded by another government agency, the Nation Power Control Centre, which verifies CPPA’s claims regarding quantity of electricity generated and consumed in the country. Both the departments are under the Ministry of Water and Power.

K-Electric in its tariff petition claimed that its fuel-price variation in November over September was Rs249.11 million (or 20.62 paise a unit) and power-purchase variation was Rs477.445m (or 39.53 paise a unit).

The company in its petition, approved by Nepra, claimed that the total adjustment amounted to Rs726.56m (60.16 paise a unit).

For the rest of the country, the Rs3.60 per unit relief will be adjusted in the bills for January as the monthly bills for November have already been dispatched by Discos.

The CPPA told Nepra that a total of 6,935.26 gigawatt hours (GWh) of electricity was produced in November at the cost of Rs24.82 billion.

Moreover, against the reference price of Rs7.30 per unit, the cost of power generation in November was Rs3.70 per unit; therefore, it proposed a reduction Rs3.60 per unit.

The low cost of power generation in November was reflected in the CPPA petition which stated that no electricity was generated from coal and high-speed diesel during the month.

The CPPA has also highlighted that the electricity was largely produced from the hydroelectric sources in November, which was 2,842.53 GWh, around 41 per cent of total generation. But it was reduced significantly in the last week of the month as water releases from Tarbela and Mangla dams were reduced.

The CPPA purchased 1,345 GWh electricity produced using furnace oil, which amounted to 19.39pc of total generation at a cost of Rs8.2 per unit. The electricity generated from regasified liquefied natural gas was 286 GWh, 4.13pc of total generation, at a cost of Rs6.9 per unit, which was cheaper than the power generation from the furnace oil.

Natural gas helped generate 1,925 GWh, or 27.7pc of total generation in the month at Rs5.5 per unit.

While the cheapest source of power production at Rs1.18 per unit was from nuclear power plants, the power generation was limited to 338 GWh.

Pakistan imported 35 GWh from Iran in November at Rs10.63 per unit, while 46.6 GWh electricity was produced from bagasse at Rs5.98, whereas 92 GWh was generated from wind and solar sources.

Meanwhile, a CPPA official told the media the price reduction would be around Rs1 per unit for the month of December, to be reflected in the bills of February.

“The cost of electricity will be higher for December 2016 as there is negligible hydroelectric generation because water discharges from Mangla and Tarbela have been stopped due to canal cleaning drive,” the official said, adding: “The generation is mainly from thermal sources.”

However, the cost of electricity will be subdued as the daily demand was 12,000 megawatts compared to supply of around 8,500MW. As a result, load-shedding has resumed in the country. Currently, urban areas are facing two to three hours of power outages daily compared to four to five hours in rural areas.

Published in Dawn December 28th, 2016