Nepra allows Rs2.87 per unit hike in XWDISCOs’ tariff, Rs1.38 in K-Electric’s

ISLAMABAD - National Electric Power Regulatory Authority (NEPRA) Friday allowed an increase of Rs 2.87 per unit in power tariff on account of monthly fuel charges adjustment (FCA) for March 2022.

The Authority, after incorporating several adjustments, has reviewed and assessed an increase of Rs.2.8680/unit in the applicable tariff for Ex-Wapda Distribution Companies (XWDISCOs) on account of variations in the fuel charges for the month of March 2022, said a decision issued here by NEPRA.

In its petition, the Central Power Purchasing Agency Guarantee Limited (CPPA-G) had sought an increase of Rs3.1573/unit in electricity tariff on account of monthly fuel charges adjustment (FCA) for March 2022 having the impact of Rs 32b plus General Sales Tax. In a petition submitted to NEPRA, on the behalf XWDISOCs, the CPPA-G said that for the month of March the reference fuel charges from the consumers were Rs 6.2295/unit while the actual fuel cost was Rs 9.3869/unit. Therefore it should be allowed to pass the increase of Rs 3.1574/unit to the consumers. Nepra had conducted hearing on CPPA petition and had reserved the judgment.

In its decision, the Authority 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 March 2022.

Lucky Electric Power Company (LEPC) has achieved COD on March 21, 2022, however, it is providing pre-cod energy from November 2021, for which fuel cost has been allowed in monthly FCA from November 2021 to February 2022 based on the reference fuel cost component as approved by the Authority.

Considering the submissions of CPPA-G, the pre-cod sale of electricity was deleted in the PPA with mutual consent between parties, consequently, the fuel cost allowed to LEPC from November 2021 till February 2022 along-with cost claimed as precod till March 21, 2022, has been deducted till the matter is resolved. The financial impact of said adjustments works out as Rs. 2,803 million and the same has been deducted as previous adjustment while working instant monthly FCA of XWDISCOs.

The FCA of March 2022 shall be charged in the billing month of May 2022 to all consumer categories of XWDISCOs, except life line consumers. This FCA is not applicable to KE consumers.

Meanwhile, NEPRA Friday allowed an increase of Rs 1.3863 per unit in power tariff to K-Electric on account of monthly fuel charges adjustment (FCA) for February.

After adjustments, the Authority has approved an increase of Rs. 1.3863/unit for KE’s consumers on account of FCA for February having an impact of Rs. 1,586 million, said a decision issued by NEPRA. KE had requested FCA of Rs. 3.452/unit having an impact of Rs. 3,950 million.

NEPRA had conducted public hearing on KE’s petition and reserved the judgment. The amount will be recovered in the bills of May 2022. The FCAs shall be applicable to all the KE’s consumer categories except lifeline consumers.

During hearing, the Authority noted that the power purchase agreement was signed between NTDCL and K-Electric on January 26, 2010 for five years for sale/purchase of 650MW on basket rates. Subsequently, a decision was made by the Council of Common Interest (CCI) in its meeting held on November 08, 2012 with respect to the modalities for withdrawal of electric power from NTDCL by the petitioner, wherein it was decided to reduce the supply of energy by 300MW from NTDCL to K-Electric. However, the aforementioned decision of the CCI has been impugned by way of suits/petitions by K-Electric in the Honorable High Court of Sindh at Karachi. No new agreement has been signed between K-Electric and NTDCL till date, and K-Electric is continuing to draw energy from the national grid, which at present is around 1100 MW.

Tanvir Ban representing KCCI submitted during hearing that high FCAs have a detrimental impact on the industrial consumers of KE. He further added that NEPRA should provide a list of all legal issues pertaining to KE.

Arif Bilwani submitted during the hearing that K-Electric has not provided the Net-Metering data in its FCA request. The Authority directed K-Electric during the hearing to provide detail of its net metering units along-with its monthly FCA request and present the same during the hearing.

KE had claimed RLNG rate of Rs. 2,479.61/MMBTU for its own power plants. However, OGRA vide decision dated March 11, 2022 has revised the RLNG rate for the month of February 2022. The rate has been revised to USD 13.9048/MMBTU, which works out as Rs.2,449.05/MMBTU. Resultantly, a deduction of Rs.41.61 million has been made to adjust for the higher rate claimed by KE. Further, KE is directed to provide revised RLNG bills.

The Authority observed that K-Eectric has been directed to provide CV test reports for both Tapal and GuI Ahmcd 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 he considered in the subsequent months. In view thereof, for the purpose of FCA for February 2022, the highest CVs reported by both Tapal and Gui Ahmed, as per the submitted test reports for February 2022, have been considered for the entire fuel consumed during the month to work out their fuel costs for February 2022. This has resulted in provisional negative adjustment of Rs. 1.22 million and Rs.3.9 1 million for Tapal and Gui Ahmed respectively.

Regarding cost of energy purchased from CPPA-G during the month of February 2022, K-Electric has used the rate of Rs. 12.4614/kWh, however, the Authority’s approved fuel cost component in the matter of XWDISCOs for the month of February 2022 is Rs.9. 1046/kWh. In view thereof, while working out the instant FCA of K-Electric, rate approved by the Authority for XWDISCOS for February 2022 has been incorporated for the energy purchased by K-Electric from CPPA-G during February 2022. This has resulted in decrease in total fuel cost by around Rs.2,315 million.

The Authority, during the hearing observed that prima facie, certain efficient power plants were not fully utilized and instead energy from inefficient sources was generated. The Authority observed that both KGTPS and SGTPS were not operated by K-Electric to their full capacities, and also less energy was drawn from NTDC during certain hours, without reducing generation from expensive plants connected to its network. Similarly KCCPP was also operated on HSD. Accordingly, for the purpose of instant FCA the Authority has decided to deduct an amount of Rs. 1.56 million from the claim of K-Electric on account of out of merit operations of plants only.

Rs50m fine imposed on NTDC

After a delay of almost 16 months, NEPRA has imposed a fine of only Rs.50 million on NTDC for the total power system collapse that occurred in January 2021.

NEPRA imposes a fine of Rs. 50 million on NTDC on account of its inability to restore power supply in a timely manner in the wake of total power system collapse that occurred on 09.01.2021 and took 20 hours (approximately) to restore the system, said a decision issued here Friday.

It is worth mentioning here that a massive electricity blackout in January 2021 plunged major part of the country into darkness.

Earlier, NEPRA took serious notice of the above incident occurred on January 09, 2021 and constituted an Inquiry Committee to thoroughly investigate the matter in the light of NEPRA Laws, Rules and Regulations. The Committee conducted the said inquiry and presented a detailed report to the Authority, on the basis of which the Authority initiated legal proceedings against NTDC. It is relevant to mention here that the Authority has also initiated legal proceedings against concerned power plants for their lapses, deficiencies and failure in the said breakdown. However, the same are under process and being dealt separately.

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