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Friday March 29, 2024

Nepra lashes out at CPPA for generating costly power

By Khalid Mustafa
March 02, 2016

Nandipur power plant

 Seeks legal action against CPPA and NTDC for not running power plants to generate cheaper electricity; Nepra cuts tariff by Rs4.11 per unit for power used in January

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has lashed out at the Central Power Purchase Agency (CPPA) for generating costly electricity through the much-touted Nandipur Power Plant and refused to pass the fuel valuing Rs4.42 billion used for power generation through the open cycle.

Nepra says costly electricity is produced by the Nandipur power plant and because of its open cycle, fuel cost had increased to Rs4.42 billion which could not be allowed to be passed on to the end consumers. However, it was noticed during the hearing held here on Tuesday about the monthly fuel adjustment for the electricity generated in the month of January 2016 that some power plants that can produce cheaper electricity had remained shut even in the month of January, 2016.

Chairman of the regulator has issued direction for legal action against the CPPA for ignoring the orders of Nepra and running costly power plants. However, the regulator has reduced the power tariff by Rs4.11 per unit in the head of monthly fuel adjustment for the electricity generated in the month of January because of the steep reduction in the price of furnace oil used for power generation.

With the decision of the regulator, the electricity consumers will be getting Rs20 billion relief. However, the consumers of K-Electric will not get the same relief.  In January, the electricity of 6.35 billion units was generated at the fuel cost of Rs42.15 billion.

However, Nepra expressed its deep anguish when it came to know the costly electricity was also generated in the month of January by Nandipur power plant and the CPPA did not run the power plants which have the capacity to generate cheaper electricity. On this disclosure the chairman got enraged and directed the authorities concerned to take legal action against the CPPA and NTDC for generating costly electricity.

The NTDC and CPPA were earlier directed to run thepower plants having the capacity to generate cheaper electricity, but both the entities did not comply with. Member tariff Khawaja Naeem pointed out saying that the NTDC was directed in clear words that it must provide the real time data access and share the merit order for electricity generation to the regulator, but Nepra was not provided the required information.

Nepra during the hearing argued saying that in the wake of reduction in furnace oil prices, Japan, Saba and Sepco power plants can produce electricity at the price of Rs5 per unit which is far cheaper than the price of electricity being generated by Nandipur power plant. 

The costs of Japan, Saba and Sepco power plants have already been paid by the people of Pakistan and now they are in a position to generate cheaper electricity. And on top of that the said three plants are situated in the load center which is why they have no transmission losses. 

Nepra asked NTDC management to sit down with the management of three power plants and find a way out in the supreme interests of the country. The general manager of CPPA said Guddu Power Plant of 747MW, Engro and Foundation power plants were non-operational because of the transmission line problems. 

He said the transmission problems will be resolved in three months and then the said plants will be able to generate electricity. Member Tariff directed the authorities concerned to look into the matter and submit the report to the regulator to this effect.