Nepra cuts power tariff by Rs2.21 a unit for December

Relief to be adjusted in February bills; K-electric

allowed provisional tariff hike of 40 paisa per unit

Islamabad

The National Electric Power Regulatory Authority (Nepra) on Thursday approved Rs2.21per unit reduction in power charges for ex-Wapda distribution companies for December 2016 under the monthly fuel price adjustment to pass the benefit of ‘cheaper cost of fuel for power generation’ on to domestic consumers. 

In a public hearing, the authority concluded that the distribution companies had charged Rs8.1037 per unit on account of fuel cost to consumers in December but the actual fuel cost was significantly lower. 

So, it directed that Rs2.21 per unit may be returned to ex-Wapda distribution companies for December 2016.

This adjustment/relief will be provided in February 2017 electricity bills to the domestic consumers of distribution companies, except in Karachi where the K-Electric [now a privatized company] is distributing its own generated electricity to the city and is not covered under this package. 

It will be also not available to the lifeline consumers consuming up to 300 units per month, and agriculture consumers as they are already enjoying subsidized electricity.

The Central Power Purchase Agency (CPPA) in its petition had proposed Rs1.85 per unit reduction in fuel based power tariff for the month under review over the reference fuel charges of Rs8.1037 per unit. 

Interestingly, it was also disclosed that the Nandipur power plant and Guddu power plant were operating at low capacity due to frequent problems in their compressors. 

Nepra expressed serious concern over it and directed the CPPA to take this issue up with the Ministry of Water and Power. 

According to the documents submitted by CPPA to the power regulating authority, Rs37 billion electricity was delivered to Discos in December 2016 having average cost of Rs6.244 a unit. CPPA had also asked for fuel adjustment of Rs4.5 billion Guddu Power plant, but was disallowed. NEPRA said that according to its calculation, the impact was Rs2.2 billion. 

The total energy generated in the country from all sources stood at 7199.66 gigawatt hours (GWh) in December at a cost of Rs37 billion. 

The CPPA supplied 6982.12 GWh to the distribution companies at a cost of Rs43.59 billion. The power firms in turn faced a net loss of 212.68 GWh, accounting for 2.95 per cent of total energy supplied.

In December, Central Power Purchasing Agency (CPPA) reported that almost 37 per cent power generation was produced through furnace oil based plants at rate of 8.65 per cent which was highest share in total power generation.

The two cheaper domestic sources Hydel and Natural gas together contributed almost 50pc of energy.   The share of power generation through hydel resources dropped to 23 per cent due to less water releases from dams following canal closures in December. 

The second largest power generation of about 27pc was based on domestic natural gas at the rate of Rs5.3 per unit.  Similarly power generation from nuclear contributed six percent with a total cost 60 paisa per unit.

Re-gasified Liquefied Natural Gas (RLNG) based power generation contributed about 4.1 percent and the cost was Rs7.04 per unit. Diesel based electricity contributed about 0.9pc power generation with a cost Rs12.04 per unit.

Hearing the on K-Electric petition that sought 40 paisas/unit hike in tariff expressed concern over its demand. The petitioner explained that due to unavailability of gas, plants were been run on furnace oil that cost them more.   

However, it allowed a provisional tariff increase of 40 paisa per unit and constituted a committee to probe why K-Electric ran its plants on furnace oil.