Nepra told about costly power production by Nandipur power plant

ISLAMABAD: The Nandipur power plant has consumed additional fuel for electricity generation inflicting loss of Rs3billion on national exchequer just in the month of March, 2016.

This has been disclosed in petition of Central Power Purchase Agency (CPPA) submitted with National Electric Power Regulatory Authority (Nepra) seeking the passing of the burden of additional fuel cost to the consumers. Nepra held the hearing here on Tuesday of all the ex-Wapda Discos seeking reduction in power tariff under monthly fuel adjustment mechanism.

The Nandipur power plant’s fuel cost in the month of March stayed at Rs6.83 per unit as against its approved cost of Rs4.52 per unit. However, in the same month of March, 2016, the fuel cost for electricity generation of the many decades old public sector power plants have been in the range of Rs3 to Rs5.36 per unit. On this stark disclosure, the regulator came down very hard on CPPA which cleverly included the impact of additional fuel cost of Rs255 million in the tariff petition, but Nepra not only detected this additional and unjustified cost in the petition, but also rejected it.

The regulator extended the relief of Rs2.83 per unit because of reduction in fuel cost incurred for electricity generation in the month of March, 2016. In the month of March, the electricity cost on furnace oil has been cheaper than the electricity being generated on LNG. According to Nepra, NTDC (National Transmission Dispatch Company) also breached the merit order of power plants for generation of electricity in the month of March. The plants which produce the costly electricity were given preference for electric power generation. The both CPPA and NTDC will face the music and required action will be taken against them, Nepra said.