Regulator was not taken into confidence regarding shutting down of LNG terminal and use of alternative expensive fuel for power generation

ISLAMABAD   -   National Electric Power Regulatory Authority (Nepra) is likely to reduce power tariff by 28.66 paisas per unit for the month of May under Fuel Charges Adjustment (FCA).

Presiding over hearing on Central Power Purchasing Agency Guaranteed (CPPA-G) petition, Nepra chairman Tauseef. H.Farooqi has said that the regulator was not taken into confidence regarding shutting down of LNG terminal and the use of alternative expensive fuel for the power generation during the dry docking of Engro Floating Storage Re-Gasified Unit (FSRU).

Central Power Purchasing Agency Guaranteed (CPPA-G) had requested National Electric Power Regulatory Authority (Nepra) to allow refunding the overcharged tariff of 12.5 paisas per unit to the consumers of Discos for the month of May 2021 under FCA mechanism. However, NEPRA has noted that against the actual fuel charge component of Rs 5.6734 per unit the reference fuel charge component was 5.9322 per unit. The fuel price variation for May was 25.88 paisa. Similarly deviation from Economic Merit Order caused an extra burden of amount Rs 354.29 million or 2.78 paisas per unit. The total decrease recommended was 28.66 paisas per unit and it will have the impact of Rs 3.6b. However, this benefit will not be provided to lifeline consumers, agriculture consumers and those domestic consumers who use upto 300 units in a month. NEPRA has reserved the judgment which will be announced later.

During hearing, Nepra officials said that in the May instead of more efficient power plants inefficient power plants were operated for power generation. Similarly against the demand of 800 mmcfd gas to the power plants 600 mmcfd gas was provided, said Nepra officials. The high cost caused by the use of inefficient power plants and system weaknesses should not be transferred to the power consumers, the regulator noted.

Chairman Nepra also showed his annoyance over NTDC over the faults in transmission system and said that NTDC was sleeping when the government was installing power plants. Why the NTDC didn’t bring the upgradation of transmission system into the government’s notice when they were installing new power plants? he questioned. Although the regulator was not taken into confidence regarding the closure of LNG terminal but Nepra will try that the consumers should be less affected by loadshedding.

The dry docking of Engro Elengy Terminal Private Limited (EEIPL) Floating Storage Re-Gasified Unit (FSRU) from June 29 to July 05 will disrupt the supply of RLNG across the country. Instead of RLNG the power plants will be operated on the expensive fuel. Chairman Nepra said that the matter of dry docking was brought to Cabinet Committee on Energy (CCoE) but the regulator was not taken into confidence over the use of alternative fuel for power generation.  

The total energy generated recorded at 13,009.51GWh, at Rs5.7009 per unit. The total cost of energy was Rs 74.166 billion. According to the CCPA-G data, net electricity delivered to Discos in May 2021 was 12,678.50GWh at Rs5.8067 per unit, total price of which was Rs73.620 billion. CPPA-G in its petition said that since the reference fuel charges for May 2021 were estimated at Rs5.9322 per unit whereas the actual fuel charges were Rs5.8067 per unit, hence a reduction of 12.55 paisas per unit has been sought for the month May 2021. CPPA-G also sought a reduction of Rs23 million in supplemental charges.

According to the data submitted to Nepra, in May 2021, hydel generation recorded at 3,465.58GWh or 26.64 percent of total generation. Power generation from coal-fired power plants was 2,618.97GWh (20.13 percent) at Rs7.83 per unit, whereas generation from HSD was recorded at 20.32GWh at Rs21.69 per unit. Generation from RFO was 771.5GWh (5.93 percent) at Rs 14.34 per unit.

Electricity generation from gas-based power plants was 1,454.39 GWh (11.18 percent) at Rs7.8506 per unit, RLNG- 2,828.55GWh (21.74 percent ) at Rs 10 per unit, nuclear 1,271.35GWh at Rs1.1388 per unit (9.77 percent), and electricity imported from Iran was 47.39GWh at Rs11.41276 per unit.

Power generation from different sources (mixed) was 16.39GWh at a price of Rs4.6467 per unit, generation from baggasse recorded at 45.45GWh at Rs5.9822 per unit. The energy generated from wind was recorded at 403.21GWh, 3.10 per cent of total generation and solar at 66.54GWh, 0.51 percent of total generation in May 2021.