NEPRA set for Rs1.58/unit tariff raise as FCA

ISLAMABAD  -  No respite in sight for the protesting electricity consumers, as NEPRA is all set to allow another hike and re­served the judgment on the petition for Rs 1.58/unit increase in tariff on account of fuel charges adjustment for month of July 2023.

In a public hearing conducted here by Nepra, on the CPPA-G peti­tion for increase in tariff, on account of monthly FCA, it was informed that despite the availability of coal, cheap electricity was not being gen­erated from the coal power plants in summer. The hearing was pre­sided over by Chairman Nepra, Waseem Mukhtar, and was at­tended by its members.

The regulator and interven­ers raised serious questions over the inefficiency of the power dis­tribution companies (Discos). Nepra expressed anger over the running expensive power plants for the last five years due to tech­nical problems and asked CPPA to furnish correct data.

A petition submitted by the Central Power Purchasing Agen­cy (CPPA) on behalf of XWDiscos said that for the month of July, the reference fuel charges from the consumers were Rs6.8935/unit, while the actual fuel cost was Rs8.9638/unit. Therefore, it should be allowed to pass the in­crease of Rs2.0703/unit to con­sumers. However, during hear­ing the CPPA-G has downward revised its claim to Rs 1.579 per unit. The reason for downward revision was due to deferring of several previous adjustments worth Rs 3.34 billion as they were were to be technically veri­fied by the Nepra.

The hike of Rs 1.58/unit in­crease, if approved by NEPRA, will burden the electricity con­sumers of additional of over Rs 26 billion (FCA+ 18pc GST).

The authority was not satisfied with the data presented by the CPPA-G. Bring the correct data here, the Chairman NEPRA di­rected CPPA and added that the burden of incorrect data will not be put on electricity consumer. 

He said that that the regula­tor will not let to transfer the burden of technical problems to consumers. The authority will look into the technical issues separately, he added.

Shocking disclosure was made during the hearing regarding Sa­hiwal Coal Power Plant, and it was informed that Nepra had set reference tariff of Rs 16/unit for Sahiwal coal plant but it had claimed Rs 27/unit for the pow­er supply.

The CPPA-G officials informed that the management of Sahiw­al coal power plant had import­ed coal at rate of $400 per ton that was not being utilized by the plant due to possible violation of merit order.

Official of NEPRA said that prices of coal had come down to $100 per ton in international market. Official representing the government suggested to allow weighted average cost of coal so that the plant could be operated to generate cheaper electricity. 

NEPRA regretted that the cheaper option of electricity gen­eration was not being utilized whereas the expensive electric­ity was being generated to bur­den the consumers.

“Why consumers should pay capacity payments,” Nepra questioned.

It was noted that electricity generation from this plant was zero in April, 3 percent in May and 8 percent in June. “What is mismanagement in coal based plants which base tariff is low and claimed of tariff are higher,” power regulator questioned.

Official of Nepra said that there were no despatches from the cheaper power plants, where­as electricity is being generat­ed from expensive plants. ”We need explanation,” the regula­tor said. Two coal based power plants had generation capacity of 3900 MW but dispatches were only 2200 MW that were 1700 MW less.

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