ISLAMABAD, July 26: Even though its members pointed out a lot of discrepancies at a public hearing on Thursday, the National Electric Power Regulatory Authority (Nepra) allowed 24 paisa per unit increase in electricity tariff for consumers of all distribution companies of Wapda, on the basis of increase in cost of fuel in June.

The Central Power Purchase Agency (CPPA) on behalf of distribution companies (Discos) had sought an increase of 26 paisa per unit.

The meeting was informed that the biggest impact on fuel-based consumer tariff was related to an increase in the price of furnace oil, from Rs64,323 in the first week to Rs65,930 per ton in the second week of June, resulting in an increase of Rs7 billion.

According to the Nepra estimates, more than 36 per cent of the total electricity produced came from hydropower units at 17 paisa per unit, followed by about 31 per cent from furnace oil-based units at Rs16.50 per unit, about 25 per cent from natural gas-based plants at Rs4.66 per unit and 5 per cent from nuclear power plants at Rs1.13 per unit. Only 1 per cent of the electricity came from diesel-based units at Rs20.33 per unit.

The Nepra members questioned the authenticity of invoices coming from about 13 small power producers and captive power producers selling their electricity to Faisalabad, Multan, Hyderabad and Sukkur power supply companies and asked Nepra case officers if they had verified the invoices. When told that the invoices were accepted as claimed by the CPPA, the Nepra members said that all such invoices should be verified before being approved.

The members also questioned payment of Rs124 million to two independent power producers (IPPs) — Hubco and Kapco — on account of partial load adjustment charges (PLAC) under which the CPPA purchases partial load dispatch despite availability of power plant.

Nepra member Shaukat Ali Kundi observed that it was strange that the country was facing acute load shortfall and the people were protesting on the roads in Ramazan but the power companies were paying such amounts to the IPPs without taking full energy.

He also objected to the payment of Rs29 million in bonuses, as efficiency incentive, to the two plants and asked if the IPPs were also penalised for poor performance.

The CPPA representative confirmed that penalty charges were imposed on IPPs for poor performance.

Mr Kundi deplored that efficiency incentives were being paid to the IPPs by overburdening the consumers. He said he would oppose in writing the payment of partial load adjustment charges, and bonuses and efficiency incentives to the IPPs by charging to the consumers because his legal advisers had found fault with such payouts especially when fuel-based tariff adjustment should only be based on the cost of fuel and nothing else.

Some Nepra members also questioned the utilisation of four loss-making generation companies of Wapda which were inefficient and producing expensive energy. They said they have been urging the government to improve their efficiency, but in vain.

A CPPA representative admitted that the four generation companies were making huge losses.