ISLAMABAD-NEPRA has reserved a judgment on the hike of Rs1.83 per unit in tariff for Discos on account of monthly FCA, as it was informed that 3000 MW cheaper electricity cannot be transmitted due to transmission constraints of NTDC.
In a public hearing on CPPA-G petition for a hike of Rs1.83/unit in tariff on account of monthly fuel charges adjustments for the month of August 2023, the regulator has reprimanded both the NTDC and Central Power Purchasing Agency for not fixing the faults in the transmission system and running cheap plants. During the hearing, Member NEPRA said that according to the third party audit, the performance of NTDC is very poor. Nepra Chairman Waseem Mukhtar chaired the hearing, while Mathar Niaz Rana (member Balochistan), Eng Maqsood Anwar Khan (KP), Ms Amina Ahmed (Punjab), and Rafique Ahmad Shaikh (Sindh) also present on the occasion.
A petition submitted by the Central Power Purchasing Agency (CPPA-G), submitted to Nepra, on behalf of Ex-Wapda Discos (XWDiscos), said that for the month of August, the reference fuel charges from the consumers were Rs6.6447/unit, while the actual fuel cost was Rs8.4746/unit. Therefore, it should be allowed to pass the increase of Rs1.8290/unit to consumers on account of FCA for August. The request, if accepted, will have an impact of Rs 33 billion (including GST) on the consumers. During hearing, official of the CPPA-G said that improvements in transmission systems could have increased the output from coal and wind based power plants. National Transmission and Despatch Company (NTDC) has been facing problems in the transmission system for one and a half years, it was further told. It was informed that due to transmission problems NTDC cannot transmit 3000 MW cheaper electricity from south to north. Member Nepra Maqsood Anwar Khan said that “I have been hearing for two and a half years that there are problems in the NTDC transmission system.” Why we allow you to receive money when you can’t transmit electricity, he further said. Member Nepra Rafiq Sheikh asked that why expensive furnace oil based power plants were utilized during the month.
Nepra official informed that violation of merit order in August resulted in an additional burden of Rs 590 million on consumers. The authority said how long the people will continue to bear the burden of expensive electricity. Member Sindh Nepra asked why there was a need for using furnace oil power plants?
The National Transmission and Despatch Company (NTDC), despite securing approval for billions of rupees from NEPRA for transmission system upgrades, has been unable to address a persistent bottleneck issue for the past year and a half. Chairman NEPRA said that due to the company’s inefficiencies, the authority has held Rs39 to 40 billion of NTDC and not passed this on to consumers, as we cannot justify it to burden consumers with the NTDC’s own inefficacies. We always do a ‘balancing act’ and make informed and justified decisions, the chairman said.
NTDC’s Deputy MD Qaiser Khan opined that since 90 percent of NTDC is based on imported materials, while the government had made the opening of LCs limit, it affected the company’s projects. He also added that land acquisition was also an issue, as people had taken stay orders from the courts. The regulator has also held our Rs40 billion, we have funding issues. Rafique Ahmad Sheikh said that we have heard the same excuses for months and years from NTDC. “You should have gone to a higher authority to resolve these issues. It would have solved the issue.” He added, “I am not satisfied with your points.”
The third-party audit report has arrived to us, we are reviewing it, the situation is not good. We can also audit the NTDC investment and its plans. “Your arguments are weak, none of your arguments is convincing,” Sheikh said. How can we allow this Rs40 billion to be passed on to the consumers? Consumers are already under stress due to high power bills. Regarding the KAPCO license extension, he said, we have initiated proceedings. The extension was given at the request of NTDC and NPPC. They argued that some months in a year come when demand is always high and its generation falls under the economic merit order. The extension is given based on the ‘take & Pay’ mode, if the company does not generate we do not pay. While presenting the case to the authority, the CPPA official on behalf of all 10 state-run Discos, said, that this time the cheaper energy was generated more while the costly was inducted less in the national grid. The petitioner said that the local coal-based power [Thar] and other cheaper sources of power addition could have been increased, but the transmission lines bottleneck from South to North was a major constraint. NEPRA has reserved the judgment and will be released after further scrutiny of the data.