ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday allowed Rs1.78 per unit increase in power tariff for all the power distribution companies, except K-Electric, on account of fuel price adjustment for electricity consumed in July.

This decision was taken a monthly public hearing presided over by Nepra’s Chairman Tauseef H. Farooqi. The Central Power Purchasing Agency (CPPA) on behalf of the distribution companies (Discos) had filed the petition for tariff increase saying the actual fuel cost in July was higher that charged to the consumers and hence an increase of Rs1.93 per unit be allowed to be recovered from consumers next month.

Nepra disallowed a couple of costs claimed by the CPPA and allowed Rs1.78 per unit increase that would put about Rs24.60bn additional burden on consumers and generate additional revenue to distribution companies. The adjustment will, however, not be applicable to lifeline consumers using less than 50 units per month as well as K-Electric consumers.

The regulator’s case officers said the consumers’ burden would have been lower by Rs5bn had the generation companies optimally utilised LNG-based and other efficient power plants instead of expensive furnace oil based units.

The CPPA team contended that economic merit order was followed in the generation sector but the Nepra’s case officers did not agree. Nepra Vice-Chairman Rahmatullah Baloch directed the CPPA and National Transmission and Despatch Company (NTDC) to submit a report on approved merit order for July and how it was implemented.

The CPPA in its petition said it had charged consumers a reference tariff of Rs3.54 per unit in July while the actual fuel cost turned out to be Rs5.46 per unit and hence it should be allowed to recover Rs1.93 per unit additional cost from consumers next month.

Total energy generation from all sources in July was recorded at 14,231 GWh costing Rs74.90bn having an average per unit fuel cost of Rs5.26 per unit. About 13,788 GWh were sold to the Discos for Rs75.41bn.

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

Published in Dawn, September 5th, 2019