ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday allowed an increase of 51 paisa per unit in consumer tariff for ex-Wapda distribution companies (Discos) on account of fuel cost adjustment based on changes in tariff benchmarks.

The higher rates for electricity consumed in June would be recovered from consumers in the upcoming billing month ie August.

The Central Power Purchasing Agency-Guarantee (CPPA) on behalf of the Discos claimed an additional cost of 70 paisa per unit on the basis of recently notified base tariff 2015-16, instead of the previous 2014-15 tariff on which the regulator used to make monthly fuel cost adjustments in the past and resulted in refunds to consumers.

The new base tariff allowed relaxed benchmarks for power companies and higher indexations on various items. Based on the 2015-16 tariff, the power regulator agreed that power generation cost was higher than actually charged to consumers in June.

However, the regulator was told before the public hearing that previous claims of Rs5.75 billion against Sahiwal Power Project had actually come down to Rs3.25bn. As a result, the average fuel cost had declined to about 51 paisa per unit. The regulator accepted the CPPA’s working at a public hearing presided over by Nepra Chairman Tariq Saddozai and also attended by member KP Himayatullah Khan.

The regulator asked the Discos to recover 51 paisa per unit from consumers in the electricity bills of August. The decision would generate additional revenue of Rs6.5bn to the power companies and would be recovered from all categories except lifeline domestic consumers, using less than 100 units per month.

This is second time in a row that consumers have to bear the additional burden of fuel cost. Last month, the regulator had increased power tariff by Rs1.25 per unit for fuel cost adjustment for May.

Lower increase in fuel cost in June was mainly because of lesser use of furnace oil, increase in hydropower and LNG-based power generation compared to May.

The CPPA in its petition said it had charged consumers a reference tariff of Rs4.99 per unit in June while the actual fuel cost turned out to be Rs5.69 per unit and hence it should be allowed to recover 70 paisa per unit additional cost from consumers next month.

Total energy generation from all sources in June was recorded at 12,913.87 Gwh at a total cost of Rs66.178bn while 12,600 Gwh were sold to the Discos at Rs71.758bn with a transmission loss of 2.36pc.

The share of hydel power generation in June improved to almost 28pc compared to 18.30pc in May. With induction of three new mega projects of 1230MW each in Punjab, the share of regasified liquefied natural gas (RLNG) captured the second position with a contribution of 25.2pc, compared to 23.8pc in May.

In contrast, Residual Fuel Oil (RFO)-based electricity generation dropped to 9pc in June compared to 19.3pc in May while gas-based generation stood at 15.7pc, down slightly from 16.27pc in May. Coal-based generation had an 11.8pc share in the country’s total power generation that was slightly lower than 12.12 pc in May.

There was no fuel cost on hydroelectricity while coal-based fuel cost stood at Rs5.76per unit compared to Rs13 per unit for furnace oil-based plants. LNG-based generation costs amounted to Rs9.31 per unit while domestic gas-based generation incurred Rs4.7 per unit.

Because of higher international oil prices and currency loss, the fuel cost of both RFO and LNG-based plants went up by almost 50 paisa and 30 paisa per unit, respectively.

Nuclear energy contributed about 5.08pc electricity to the national grid at a cost of 93 paisa per unit while power produced by sugar mills accounted for less than 1pc share at Rs6.18 per unit. The electricity imported from Iran had a cost of Rs11.57 per unit with its total share in generation at 0.41pc.

Wind produced 3.31pc electricity at zero fuel cost while 0.44pc contribution came from solar energy again at no cost.

The higher tariff adjustment will not be charged to lifeline consumers using up to 50 units per month but all other consumers of all categories, including industrial sector and agriculture tube wells would have to bear the additional burden. The decision will not be applicable to K-Electric consumers.

Published in Dawn, July 25th, 2018