April bills to shock consumers as Nepra raises power tariff by Rs4.85 per unit
ISLAMABAD – National Electric Power Regulatory Authority (Nepra) Friday increased power tariff by Rs 4.85 per unit for the consumers of XWDiscos (Ex-Wapda Discos) on account of fuel charges adjustment for month of February 2022.
“The Authority has reviewed and assessed an increase of Rs 4.8530/KWh in the applicable tariff for Ex-Wapda Discos on account of variation in the fuel charges for the month of February 2022,” said a decision issued by NEPRA here. The decision will have an impact of Rs 44.10 billion (fuel charges+GST) on the power consumers.
However, Vice Chairman Nepra Rafiqe Ahmed Shaikh dissented to the decision and termed the passing of the burden of Rs 1.374b to the consumers as unjustified saying that it occurred due to mismanagement in supply of re-Liquefied Natural Gas (RLNG). In his dissent note, he said that the short supply of the RLNG during February resulted in financial impact of Rs 1.374b, as an imported fuel RLNG supply can be ensured through better supply chain management. Accordingly, such mismanagement into the availability of required RLNG cannot be passed on to the consumers, he added.
Vice Chairman NEPRA, who is also member Sindh, further said that the operation of less efficient plants, like KAOCO on RFO, against the most efficient RLNG power plants had adversely affected the cost of fuel. “I have also reservations on the purchase of electricity from all those IPPs, whose PPAs were amended/extended without approval of the authority,” he further added.
In a petition submitted to NEPRA, on the behalf of power distribution companies (XWDISOCs), the CPPA-G said that for the month of February the reference fuel charges from the consumers were Rs 4.2516/unit while the actual fuel cost was Rs 9.1957/unit. Therefore it should be allowed to pass the increase of Rs 4.994/unit to the consumers. However, after various adjustments the authority has worked out an increase of Rs 4.8530/unit in tariff.
During hearing, the Authority observed that CPPA-G has purchased energy of 33.822 GWH from Tavanir Iran in February 2022 at a cost of Rs.530.628 million, however, contract between CPPA-G and Tavanir Iran for import of power up-to 104 MW has expired on December 31, 2021. In view thereof, the cost of electricity purchased from Tavanir Iran is being allowed strictly on provisional basis, subject to its adjustment once the Authority decides the extension in the contract between CPPA-G and Tavanir Iran or otherwise. The cost being allowed on provisional basis is to avoid piling up of the cost and one time burdening of the consumers in future.
The Authority further observed that fuel cost of certain power plants has not been claimed by CPPA-G as per the Authority’s approved rates, accordingly, the same has been adjusted downward in line with the Authority’s approved rates for the month of February 2022.
CPPA-G also claimed an amount of Rs.432 million on account of previous adjustments in the FCA of February 2022. The same has been verified as negative Rs.18.9 million and accordingly has been included in the monthly FCAs of February 2022. During the hearing, the Authority also observed that energy from costlier RFO based power plants was generated to the tune of over Rs. 11,301 million during the month of February. NPCC/NTDC explained that due to non-availability of RLNG as per the requirements electricity was generated through RFO/HSD based power plants. The Authority has decided not to deduct any amount in the instant monthly FCA on account of deviation from EMO.
In view of the above discussion, the Authority has calculated the fuel cost for the month of February 2022, after accounting for the aforementioned adjustments, and including costs arising out due to application of various factors, as provided in the respective PPAs of the power producers and claimed by CPPA-G in its FCA request. Here it is pertinent to mention that the amount arising out due to application of PPA factors, for the six RFO based IPPs, incorporated under 2002 Power Policy, is being allowed on provisional basis and shall be subject to adjustment, based on the final outcome of the ongoing suo moto proceedings against RFO based IPPs.
The increase of Rs.4.8530/kWh shall be applicable to all the consumer categories except lifeline and KE’s consumers. The distribution companies shall reflect the FCA in respect of February 2022 in the billing month of April 2022.