ISLAMABAD - The National Electric Power Regulatory Authority (NEPRA) yesterday approved Rs3.95 per unit reduction in power tariff for the ex-Wapda distribution companies under monthly fuel adjustment formula for April.

At a public hearing, the Nepra determined that the distribution companies had charged Rs7.62 per unit on account of fuel cost to consumers in April but the actual fuel cost was considerably lower. The meeting, presided over by vice chairman Himayatullah Khan, decided that Rs 30 billion or Rs3.95 per unit should be returned to the consumers.

This adjustment/relief will be available to domestic consumers in entire Pakistan, except in Karachi and the lifeline consumers. The reason for not providing relief to the consumers of the K-Electric is that it is a privatised entity and distributing its own generated electricity to the consumers in Karachi and is not covered under this determination. Besides the consumers of K-Electric, the relief will also not be available to the lifeline consumers consuming up to 300 units per month, as they are already being provided subsidized electricity. This compensation will be available to consumers in their July electricity bills.

In pursuance of Section 31(4) of the Nepra Act (XL of 1997) and the mechanism for monthly fuel price adjustment prescribed by the authority in the tariff determinations of ex-Wapda distribution companies, the authority has to review and revise the approved tariff on account of any variations in the fuel charges on monthly basis. The Central Power Purchase Agency (CPPA) had filed for April fuel price adjustment (FPA) with authority. The CPPA had solicited Rs3.42 per unit reduction in fuel based power tariff for April saying the actual cost stood at Rs4.21 per unit against reference tariff of Rs7.62 per unit. The regulator, however, disallowed a couple of items claimed by the CPPA and approved Rs3.95 per unit cut. During the hearing, the CPPA also informed that furnace oil-based power generation continues to be cheaper than gas-based generation because of imported regasified liquefied natural gas (RLNG) factor.

To the questions raised by the authority, general manager National Transmission and Dispatch Company (NTDC) Mohammad Ilyas and general manager CPPA Mohammad Rehan admitted that merit order was not followed in April. “To accommodate RLNG-based power generation the cheaper furnace oil-based power plants were not operated in full capacity,” they informed. The authority was further informed that the furnace oil-based generation had dropped by 13 per cent in April but on the other hand RLNG-based electricity was enhanced by 10 per cent.

Nepra vice chairman expressed displeasure that consumers had been denied a relief of Rs4 billion in April by not utilising furnace oil-based plants and instead producing energy from RLNG. Nepra’s member Sindh Syed Masoodul Hassan Naqvi also deplored that power companies did not care for the interests of the consumers.

The CPPA reported that furnace oil-based power generation cost stood at Rs5.38 per unit compared to gas based costs of Rs5.73 per unit and Rs11.85 per unit for diesel based plants, no fuel cost for hydropower plants and Rs1.16 per unit of nuclear plants. The fuel cost of electricity imported from Iran stood at Rs10.6 per unit.

The CPPA reported that a total of 7.63 billion units of electricity were supplied to distribution companies in April at a total cost of Rs32 billion. It said the hydropower generation contributed about 30.5 per cent while furnace oil-based plants generated over 28.8 per cent energy. Gas based plants generated 32.3 per cent electricity for the national grid followed by 5.39 per cent of nuclear and 0.17 percent by diesel plants.