The National Electric Power Regulatory Authority (Nepra) has rejected the petition of Central Power Purchasing Agency-Guarantee (CPPA-G) for 80 paisa hike in power tariff and instead reduced the tariff by 21 paisa per unit on account of fuel cost adjustment for the month of June 2021.

The CPPA-G had requested the regulatory authority to increase the power tariff by Rs0.8054 per unit under the monthly fuel cost adjustment (FCA) for the month of June.

During the hearing, Nepra noted that in its petition the CPPA-G had sought adjustments of Rs13 billion for the last three years, adding that the adjustments would result in provision of benefit of Rs11 billion to the consumers.

CPPA-G officials said that they had reconciled the adjustments, which Nepra did not approve. They said that they would present a separate case to the regulator.

Read: Pleas filed with NEPRA for power tariff hike

Nepra member Rafiq Sheikh asked to look into the legal aspects regarding these adjustments, while the Nepra chairman said the authority would decide on these adjustments later.

Nepra officials further said that running plants beyond the merit order would put an additional burden of Rs1.5 billion.

“We have been provided 200 mmcfd less LNG,” National Power Construction Corporation (NPCC) officials said, adding that LNG and coal shortages would cost Rs219 million.

The regulator observed that against the actual fuel charge component of Rs5.7968 per unit, the consumers were charged reference fuel charge of Rs5.9338 per unit. There is a price variation of 16.75 paisa. The violation of economic merit order (EMO) will save the consumers another 4.94 paisa, thus the total reduction in tariff is calculated to be 21.69 paisa, said Nepra.

The impact of reduction in tariff will reflect in electricity bills of next month. The regulator will issue its detailed decision regarding reduction in tariff later. The decision will not apply to lifeline, agricultural and K-Electric consumers.

“Does CPPA have any power transmission agreement with National Transmission & Despatch Company (NTDC),” Sindh Nepra member questioned during the public hearing. The CPPA-G officials informed that NTDC has power transmission agreements with power companies.

“If CPPA does not take responsibility for anything, why have they brought tariff petitions,” the Sindh Nepra member questioned? He further said that everyone should know where the problem is coming from.

“Institutions have been holding each other accountable for two-and-a-half years and now it should be settled who is responsible,” he added.

They decided to call a meeting of representatives of CPPA, NTDC and distribution companies to settle the issue.

The government is investigating the recent power crisis, said Nepra chairman and added that the issue of non-availability of fuel is related to the Oil and Gas Regulatory Authority (Ogra) that is beyond our domain. The CPPA in its petition for monthly FCA, on behalf of XW-distribution companies, submitted to Nepra said that it had charged consumers a reference fuel tariff of Rs5.9344 per unit in June while the actual fuel cost turned out to be higher. The CPPA also sought adjustment of Rs13 billion for three year. The CPPA requested to increase the tariff by Rs0.8054 per unit.

Read more: NEPRA allows 26.44 paisa cut in power tariff

According to the data provided to Nepra, energy generation in June 2021 was recorded at 14,361.17 GWh. The total cost of energy generated amounted to Rs81.184 billion. The total electricity sold to distribution companies was 13,971.36 GWh for Rs94.165 billion. The total transmission losses during June were 2.71%.

The share of hydropower generation in June increased to 29.40% or 4,222.15 GWh from 3,465.58 GWh or 26.64% in May. Power generation from coal-fired power plants decreased to 2,589.79 GWh or 18.03% in June from 2,618.97 GWh or 20.13%. The cost of the generation from coal increased from Rs7.83 per unit in May to Rs8.1426 per unit in June.

The use of RFO power generation increased to 1,174.20 GWh or 8.18% in June from 771.5GWh (5.93%) in May. The tariff for RFO-based electricity also increased to 14.5285 per unit in June from 14.34 per unit in May. Generation from high speed diesel increased to 61.35 GWh from 20.32 GWh in May. However, the cost of diesel-based electricity decreased from Rs21.69 per unit in May to Rs20.2673 per unit in June.

The generation of RLNG based electricity was 2,701.34 GWh or 18.81% in June at a cost of Rs10.5771 per unit.

Gas based electricity contributed 1,303.84 GWh or 9.08% at Rs8.1607 per unit.

Published in The Express Tribune, July 29th, 2021.

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