Nepra allows Rs1.25/unit additional tariff on fuel cost adjustment

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday allowed the power distribution companies (discos) to charge consumers an additional Rs1.25/unit in their July bills on account of monthly fuel cost adjustment.

The apex power watchdog took the decision in a public hearing that was presided over by Nepra’s member from Punjab Saif Ullah Chatta, while member from Khyber Pakhtunkhwa Himayat Ullah Khan accompanied him. Chairman of the Senate’s Standing Committee on Power Fida Muhammad also attended the proceeding.

The regulator said it charged consumers with low rates in May despite high power generation cost. It directed the discos to collect the additional Rs1.25/unit from the consumers in the electricity bills of July, as they were undercharged in May. The decision was taken under Nepra’s monthly fuel adjustment formula. Its cumulative burden on consumers would be estimated around Rs15.7 billion.

The adjustment/increase in tariff will not be charged from lifeline consumers who consume up to 50 units. The increase will also be applicable on industrial and agriculture consumers. The decision is, however, not applicable on the K-Electric consumers.

Member Nepra Khan told the meeting that circular debt is ballooning due to the system’s technical faults and inept administration, while consumers also have to bear up with the system inefficiencies.

Khan said cheap gas is being provided to state-run power generation companies, which have low efficiency. “Had the gas been supplied to efficient independent power producers more low cost electricity could have been produced and now we would have increased per unit tariff by 30 to 35 paisas.”

Member Nepra, expressing concern over the government’s policy, said expensive gas is purchased from Qatar at Rs13 per unit, while Balochistan is denied of six rupees per unit on account of gas supply.

The Central Power Purchasing Agency (CPPA) had filed a petition with the Nepra, seeking an increase of Rs1.32/unit on account of monthly fuel adjustment.

The CPPA, in its petition, said it had charged consumers a reference tariff of Rs5.2908/unit in May against the actual fuel cost of Rs6.6123/unit, requesting an increase of Rs1.32/unit.

Total energy generation from all sources in May was recorded at 12,117.67 gigawatt-hours (GWh) at a total cost of Rs75.872 billion.

The share of hydropower generation, during the month, was 18.30 percent or 2,217.61 GWh, while share of residual fuel oil-based electricity generation was 19.3 percent or 2,338.23 GWh with cost of Rs12.47 per unit.

Gas-based electricity generation stood at 1,971.34 GWh in May, 16.27 percent of total generation with cost of Rs4.846/unit. LNG’s power generation stood at 2,890.17 GWh in May with cost of Rs9.1022/unit. Power generated from coal was 1,468.95 GWh, which accounts for 12.12 percent of total generation and its cost was 5.761/unit. Nuclear energy contributed 656.17 GWh or 5.41 percent and its generation cost was Rs1.02/unit. The electricity imported from Iran was 53.63 GWh at a price of Rs11.57/unit and its total share in generation was 0.44 percent in May.

Baggasse-based electricity contributed 113.45 Gwh or 0.94 percent at cost of Rs6.208/unit. Similarly, wind power generation stood at 288.41 GWh (2.38 percent), followed by solar 62.62 GWh or 0.52 percent. The CPPA said it did not purchase electricity from diesel-based plants in May.