Nepra notifies Rs1.83 per unit increase in electricity tariff

Updated November 21, 2019

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The increase is not applicable to K-Electric and lifeline consumers using less than 50 units of other Discos. — AFP/File
The increase is not applicable to K-Electric and lifeline consumers using less than 50 units of other Discos. — AFP/File

The National Electric Power Regulatory Authority (Nepra) on Thursday notified a Rs1.83 per unit increase in electricity tariff under monthly fuel price adjustment for electricity consumed in September to generate Rs24 billion revenue to ex-Wapda distribution companies (Discos).

The decision to approve the tariff increase was taken at a public hearing on November 5 presided over by the regulator’s member Punjab Saifullah Chattha and attended by member Balochistan Rehmatullah Baloch.

The additional fuel cost will be charged to consumers in the coming billing month i.e. December. The increase is not applicable to K-Electric and lifeline consumers using less than 50 units of other Discos.

The price adjustment "shall be shown separately in the consumers' bills on the basis of units billed to the consumers in the month of September 2019", Nepra said in its notification.

The Central Power Purchasing Agency (CPPA) had sought an increase of Rs2.97 per unit under fuel price adjustment for the month of September for Ex-Wapda Discos. The CPPA said that since the actual generation cost amounted to Rs5.81 per unit against a reference price of Rs2.84 per unit, the Discos should be allowed to recover another Rs2.97 per unit from consumers in the coming month.

The monthly public hearing was first held on October 30 but Nepra had rejected the petition saying it could not allow Rs7.7bn cost of furnace oil-based generation charged to consumers when cheaper sources were available in the system. It had called for plant-wise details of available capacity across the generation system and how the furnace oil-based plants made up to the economic merit order.

CPPA – the petitioner on behalf of all Discos of ex-Wapda – later submitted plant-wise data. The regulator said that since the petitioner had submitted the required data very close to the revised hearing schedule, it would need to be verified. It also advised the CPPA to provide the relevant information in an approved format. The CPPA team said it would require two weeks for compliance but in the meanwhile its cash flows were being affected.

The regulator decided to allow undisputed increase in monthly fuel price adjustment based on verified data and put on hold the controversial cost of Rs7.7bn on account of furnace oil-based power production and treat it as previous-month adjustment in the next monthly hearing subject to verification of data.

Pending this Rs7.7bn controversial adjustment, Nepra’s technical team had worked out an increase of Rs2.32 per unit in monthly fuel price adjustment including a previous month's claim of Rs7bn. The Nepra panel did not agree to this proposal and disallowed Rs5bn for further verification and allowed Rs2bn to be charged to consumers.

The CPPA reported total energy generation in September at 13,621 GWh at a total price of Rs70.231bn or Rs5.16 per kWh. The net electricity delivered to power distribution companies stood at 13,225 GWh at a cost of Rs76.89bn or 5.81 per kWh. About 2.91 per cent losses were reported at the transmission stage.

The share of hydropower generation stood at 37pc in September against 40pc in August which has no fuel cost. The share of coal-based energy generation stood at 16.39pc at a cost of Rs5.38 per unit.