ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday notified about 90-paisa per unit increase in electricity rates for ex-Wapda Distribution Companies (Discos) to generate about Rs6.9 billion additional revenue to the troubled power sector.

The increase was allowed on account of monthly fuel cost adjustment (FCA) for electricity consumed in January. This would be charged to consumers in the current billing month. The tariff increase will be applicable to all consumers except lifeline consumers ie 50 units per month. This FCA is also not applicable to K-Electric consumers.

The regulator had conducted the public hearing on the subject on Feb 25 and questioned the justification for furnace oil and diesel based expensive power generation besides higher fuel cost for 9-10 power plants and some previous adjustments. Discos had demanded about 93-paisa per unit increase with expected revenue of Rs7.1bn.

The Central Power Purchasing Agency (CPPA) in its petition said Discos had charged consumers a reference fuel tariff of Rs5.76 per unit in January but the actual fuel cost turned out to be Rs6.69 per unit, hence it should be allowed to charge 93-paisa per unit additional cost to consumer.

However, after various adjustments and disallowed claims, Nepra worked out an increase of about 90-paisa per unit in FCA.

In its order, the regulator also put on record that besides its own concerns the Ministry of Planning, Development and Special Initiatives also pointed out that the government had put a ban on utilisation of furnace oil and high-speed diesel for power generation. The planning ministry also questioned that despite the ban 1,020 GWh electricity had been generated on furnace oil and diesel.

In contrast only 916 GWh were generated from regasified-LNG, for which CPPA may be asked to explain the reasons for not utilising the full capacities of RLNG plants. In case of any transmission bottlenecks, an investment plan should be presented to remove any transmission constraints.

The regulator said the that, prima facie, certain efficient power plants were not fully utilised and instead energy from costlier furnace oil and diesel based power plants was generated to the tune of over Rs12.9bn during January.

Nepra said it had been directing National Power Control Centre (NPCC), National Transmission & Despatch Company (NTDC) and CPPA repeatedly to provide complete justification in this regard and submit complete detail for deviation from Economic Merit Order (EMO), showing hourly generation along with the financial impact for deviation from the EMO.

The regulator’s member from Sindh Rafique A. Shaikh in his additional note said the RLNG was an important fuel and its availability could be ensured through efficient management. He said the system operator also reported during the hearing that the requisite RLNG could not be supplied to power sector despite timely indents and its subsequent reminders.

He said that since the planning ministry had also expressed concern over use of costlier fuels, explanation should be sought from the system operators and necessary adjustments and actions be made accordingly.

Total energy generation from all sources in January was recorded at 8,078 GWh at a total fuel cost of Rs49bn at the rate of Rs6.06 per unit. After accounting for about 4pc transmission losses, about 7,728 GWh energy, was delivered to Discos at Rs51.7bn at the rate of Rs6.68per unit.

The data showed that hydropower generation had a nominal contribution to overall energy mix and stood at about 13pc compared to the highest share of 31pc in October and 40pc each November and December. The steep fall was because of canal closure for annual maintenance.

Published in Dawn, March 10th, 2021