Discos get Rs2.51 hike to generate extra Rs34bn

Published October 28, 2021
The Central Power Purchasing Agency (CPPA) had demanded that Discos should be allowed to charge Rs2.66 per unit additional fuel cost to consumers to raise Rs36bn next month. — AFP/File
The Central Power Purchasing Agency (CPPA) had demanded that Discos should be allowed to charge Rs2.66 per unit additional fuel cost to consumers to raise Rs36bn next month. — AFP/File

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday firmed up charging an additional Rs2.51 per unit fuel cost to consumers for electricity they consumed in September so that of ex-Wapda distribution companies (Discos) could mop up additional revenue of Rs34 billion in November.

This was concluded at a public hearing presided over by Nepra Chairman Tauseef H Farooqui on the request of the Central Power Purchasing Agency (CPPA) which demanded that Discos should be allowed to charge Rs2.66 per unit additional fuel cost to consumers to raise Rs36bn next month.

Higher rates would be recovered from power consumers in November

The Nepra case officers pointed out that about Rs2.70bn additional burden was because of violation of economic merit order and Rs1.10bn because of shortage of LNG. A Power Division officer explained that power companies had demanded 960 million cubic feet per day (mmcfd) of LNG in September but total supplies stood at 660mmcfd. The Power Division also reported that furnace oil consumption was higher than estimated in reference price for September because some other power plants were on outage as demand increased by seven per cent during the month.

The Power Division official said the LNG issues could not be overcome without creating storages. Nepra’s member Sindh noted with concern that until such unseen time the consumers would have to pay the price of ill planning that they had been facing for 8-10 months. He said it was unfortunate that a steam turbine had been out of order since 2013 and could not be repaired while the transmission system operator (NTDC) had to face over a billion rupees worth of deductions due to system constraints in 2021 alone.

The Nepra chairman expressed concern over violation of merit order, shortage of LNG and absence of managing director of NTDC from the hearing to respond to various questions.

He said against a demand for Rs2.66 per unit additional fuel cost, the Nepra had worked out about Rs2.51 per unit FCA after disallowing above claims but a notification would be issued in a couple of days after verification of certain dataset.

The hearing was told that the share of inexpensive hydropower in overall power generation had slightly improved but the increase in the prices of imported fuels — coal, LNG and furnace oil — had necessitated additional burden on consumers. On behalf of all the ex-Wapda Discos, the CPPA claimed that the Discos had charged a reference fuel cost of Rs5.023 per unit to consumers in September, but the actual fuel cost turned out to be Rs7.68 per unit, up 53pc, hence an additional cost of Rs2.66 per unit should be charged to consumers.

The higher electricity rates, on notification by the regulator, would be recovered from all consumers in the coming billing month (November), except those using less than 50 units per month.

Interestingly, the share of hydropower supply increased to 36.24pc in September from about 35pc in August and had no fuel cost. On the other hand, LNG-based power contribution also increased to 18.9pc in September when compared to 18pc in August.

Published in Dawn, October 28th, 2021

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