Nepra increases power tariff by Rs4.83 per unit for KE’s consumers

Islamabad – National Electric Power Regulatory Authority (NEPRA) has allowed an increase of Rs4.83/unit for the consumers of K-Electric (KE) on account of monthly Fuel Charges Adjustment (FCA) for March 2022.
In a petition submitted to NEPRA, KE had requested transfer of Rs5.275/unit to consumers on account of monthly FCA, having an impact of Rs8.592 billion; however, after analysing the data NEPRA has allowed Rs4.83/unit.
NEPRA has conducted public hearing on CPPA petition on April 27, 2022. During hearing Tanvir Ban representing KCCI submitted that high FCAs have a detrimental impact on the industrial consumers of KE.
Aneel Mumtaz inquired about the basis for change in the rate of energy purchased from CPPA-G. It was explained that KE had initially requested cost of energy purchased from CPPA-G on the basis of Fuel Cost Component of February 2022, as the rate for March 2022 was not available. Subsequently, K-Electric revised its request based on the FCA request of CPPA-G in the matter of DISCOs for the month of March 2022. Arif Bilwani during the hearing submitted that many plants owned by KE are being run on old provisional heat rates, which need to be updated. He further added that KE should buy more electricity from CPPA-G being cheaper than its own generation.
The authority observed that K-Electric has requested an amount of Rs213.32 million for operation of KCCPP on HSD during March 2022. The authority for the purpose of instant adjustment has provisionally considered the same amount i.e. Rs213.32 million, as requested by K-Electric, based on heat rate of 7,950.183 btu/kWli (at 100 percent as given in heat rate report by IE), with same CV of HSD and auxiliaries as reported by KE. Any adjustment, once the authority approves the heat rate/auxiliaries of KCCPP on HSD, and on account of CV would be adjusted subsequently along with cost allowed previously.
The authority observed that K-Electric has been directed to provide CV test reports for both Tapal and Gul Ahmed for each month from their fuel suppliers, third party and also from their own labs. KE has submitted certain reports in this regard which are under review and adjustment if any will be considered in the subsequent adjustments. In view thereof, for the purpose of current month FCA, the highest CVs reported by both Tapal and Gul Ahmed, as per the submitted test reports for the current month, have been considered for the entire fuel consumed during the month to work out their fuel costs for the current month. This has resulted in provisional negative adjustment of Rs4.58 million and Rs1.41 million for Tapal and Gul Ahmed, respectively.
Regarding cost of energy purchased from CPPA-G during the current month, K-Electric has used the rate of Rs9.387/kWh; however, the authority’s approved fuel cost component in the matter of XWDISCOs for the current month is Rs9.0975/kWh. In view thereof, while working out the instant FCA of K-Electric, rate approved by the authority for XWDISCOS for March 2022 has been incorporated for the energy purchased by K-Electric from CPPA-G during March 2022. This has resulted in decrease in total fuel cost by around Rs224.74 million.
Regarding the cost of Rs497.377 million claimed by KE on account of BQPS-III, it is highlighted that the authority has allowed KE the project cost of BQPS-III in its MYT for the control period of FY2016–FY2023 after benchmarking the same with project cost of Haveli Bahadur Shah (HBS) RLNG power plant i.e. $0.694 million/MW. It is pertinent to highlight here that the abovementioned project cost of $0.694 million/MW also includes the cost of pre and post synchronization testing and commissioning cost including the cost of fuel during testing. Foregoing in view, it is clear that the project cost of $0.694 million/MW allowed to KE for BQPS-III already includes all the types of testing and commissioning costs and no separate testing and commissioning cost is required to be allowed to KE. In view of the above, the request of KE to allow additional testing and commissioning cost, over and above the allowed project cost for BQPS-III, does not merit consideration and the same has not been considered.
For the claimed auxiliary of 2.1 percent for BQPS-III, the authority has adjusted the same to 2.047 percent, based on EPC guaranteed data, for the purpose of working out the units sent out on provisional basis subject to adjustment based on test.
The authority carried out an in-house analysis of the data provided by K-Electric for the month of March 2022, to work out the financial impact due to deviation from EMO. Regarding the financial impact due to underutilisation of efficient plants on account of lower gas pressure, a letter was issued to KE on September 16, 2021, whereby, it was directed to resolve its gas pressure/lower gas quantity issues within thirty days. In response, KE has informed that it is in the process of resolving the lower gas pressure issue; however, there are certain meetings with stakeholders that will take place in due course of time. Subsequently, K-Electric has shared details of communication with SSGC and Ministry of Energy (Petroleum Division) regarding the finalization of GSA. However, during the FCA meeting, K-Electric’s representatives submitted that the draft GSA between KE and SSGC does not guarantee the Gas Pressure or Quantity and the Gas/RLNG will be available with KE on “As and When” available basis even after the GSA is signed. In view of the above, an amount of Rs2 million has been deducted provisionally from the FCA claim of KE for the month of March 2022.
After analysing the data, the authority has approved FCA of Rs4.8269/unit for the month of March 2022 having an impact of Rs7.862 billion. The FCA will be recovered in the bills of June 2022, and it shall be applicable to all the consumer categories except lifeline consumers.

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