Nepra allows XWDiscos to charge additional Re0.79/unit from consumers

ISLAMABAD-The National Electric Power Regulatory Authority (Nepra) on Thursday allowed the ex-WAPDA Discos to charge an additional Re0.7917 per unit from consumers on account of monthly fuel charges adjustment (FCA) for March.

The increase will burden the power consumers of XWDiscos by additional around Rs7.8 billion (including GST) which they will pay in May 2023 power bills. NEPRA had conducted public hearing on the Central Power Purchasing Agency Guarantee Limited (CPPA-G) petition for the hike of Re 1.1738/unit in the tariff on account of monthly FCA for March, however the regulator after initial workout has calculated that the increase will be Re0.0.7917/unit.

The hike will not be applicable to Lifeline customers, said a NEPRA decision issued here. In a petition submitted to NEPRA, on the behalf of power distribution companies (XWDISCOs), the CPPA-G said that for the month of March the reference fuel charges from the consumers were Rs 8.7122 per unit, while the total cost per unit, including previous adjustments/arrears, was Rs 9.8860 per unit. The CPPA-G has requested that it should be allowed to pass the increase of Rs1.1738 per unit to the consumers. CPPA-G in the instant monthly FCA has also claimed Rs.13.38 billion as arrears, which was previously withheld by the Authority in June 2021. Out of total claim of Rs. 13.38 billion, an amount of Rs. 8.764 billion has been verified and Rs. 819 million has been disallowed. The verified amount of Rs.8.746 million has been included while working out the FCA of March 2023. Regarding remaining amount of Rs. 3.802 billion which is under process of verification, CPPA-G during hearing requested to allow the same on provisional basis, considering the high interest charges on pending amount which is neither in the interest of consumers nor the power sector. 

The Authority keeping in view the request of CPPA-G has decided to allow the remaining amount of Rs. 3.802 billion on provisional basis in the FCA of March 2023, subject to adjustment based on outcome of final verification. It was observed that during March 2023, the system operator had curtailed the drawl of energy from efficient power plants due to following reasons along-with financial impact of such deviations; system constraints i.e. due to overloading of Thar-Matiari CCT, Rs.275 million, due to contractual obligations, Rs.412 million, due to permanent fault, Rs. 485 million and due to North South Balancing Rs.78 million In view of the above, the financial impact on account of system constraints, permanent fault, contractual obligation, north-south balancing & underutilization, amounting to Rs. 1,250 million, is provisionally withheld from the FCA claim for the month of March 2023, till the time NTDC provides complete justification to the satisfaction of the Authority. CPPA-G sought advice regarding relevant entity for withholding the amount of deduction from EMO. CPPA-G in its letter referred to NEPRA FCA decision for the month of January 2023, wherein the Authority withheld Rs.5,465 million on account of deviation from EMO. Since the deduction is made by the Authority due to deviation from EMO by NPCC, which is part of NTDC, therefore, Authority directed CPPA-G to pass on the impact of such deduction to NTDC. Any such adjustments in past made by the Authority on account of deviation from EMO should also be recovered from NTDC.

The additional note written by Member Nepra Sindh Rafiq Sheikh said that the three most efficient RLNG power plants are the Quaide-Azam Thermal Power Plant (QATPL), Haveli Bahadur Shah (HBS) and Baloki; efficiency of these power plants is above 61%. The utilization factors of these three most efficient RLNG power plants were; QATPL around (44.52%), HBS around (61.75%) and Baloki around (69.75%) during the month of March, 2023. It is noted that the accumulated claim by these power plants against part load operation during the above month is Rs. 3.369 billion. The full utilization of these power plants could minimize the loadshedding on one hand while on the other hand it could help avoid part load charges of Rs. 3.369 billion. 

As per the data submitted by NPCC, the average RLNG allocated to power sector during the month of March, 2023 was 519 MMCFD, whereas average consumption was 394 MMCFD. However, due to less allocation of RLNG to the power sector during two days in the aforementioned month, RFO plants were operated to meet with the system demand, which resulted in indicative financial impact of Rs. 20.22 million during the aforesaid month. Efforts should be made to improve the supply chain of RLNG to fully utilize the most efficient RLNG power plants and avoid the part load adjustment charges. The utilization factor of power plants at Central Power Generation Company Limited (CPGCL), including the newly commissioned Guddu 747 machine, remained very low despite availability of dedicated cheaper gas. Forced outage of unit 16 (248MW) of Guddu 747 and Guddu old units i.e. unit 6, 10, 11, 12 & 13 (S80 MW) resulted in financial losses due to operation of costlier power plants. 

The financial impact due to’Underutilization of efficient power plants” and “System Constraints” is being deducted from day one in the monthly FCA determination. As mentioned at para 21 of the instant decision, an amount of around Rs.1,250 million has been deducted for the month of Mar. 23 and up-till Mar. 2023, a total amount of over Rs.32 billion has been withheld under above two heads. The deduction of Rs.1,250 million made during the month of Mar. 23, also includes Rs.275 million on account of overloading of Thar-Matiari CCT leading to curtailment of Thar coal based energy projects. However, impact due to RLNG shortage had not been deducted as procurement and allocation of RLNG is made by Petroleum Division keeping in view of its sectorial priorities. NPCC always maintains that they raise their demand for RLNG well within the stipulated time as agreed with Petroleum Division through Power Division. Since NEPRA is the regulator of power sector bearing no regulatory control over Petroleum Division, it is not within NEPRA’s domain to penalize Petroleum Division for not purchasing RLNG or not allocating the quantities as demanded by NPCC. 

Moreover, it is not professionally justified to penalize NPCC for not receiving the demanded quantities of RLNG from Petroleum division. Therefore, the Authority chose not to penalize NPCC for something which is not a failure on their part. However, the Authority being cognizant of the matter has already issued advisories to the Ministry of Energy, Power Division, to take up the matter with Petroleum Division for allocation of required quantities of RLNG to power sector on an expeditious manner so as to protect the consumers for any differential cost arising due to unavailability of RLNG.

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