ISLAMABAD: Con­cerned over the quality of power supply in Karachi, Hyderabad and Sukkur, the National Electric Power Regulatory Authority (Nepra) has directed all the former Water and Power Development Authorities (Wapda) distribution companies to refund Rs1.90 per unit to consumers for overcharging them in May.

The tariff cut would be adjusted in the next monthly bill with a total financial impact of Rs19 billion.

Speaking to the media on Tuesday on the sidelines of a public hearing, Nepra chairman Tariq Saddozai said the investigation team appointed to look into extended power cuts in Karachi and Hyderabad earlier this month had not yet submitted its report. He added that the report was expected next week and would be made public after its approval by the regulatory body.

The regulatory authority claims Wapda distribution companies overcharged customers in May

According to sources, Nepra’s five-member investigation team held K-Electric (KE) and Hyderabad Electric Supply Company (Hesco) responsible for extended power cuts and recommended legal action against both along with a penalty. The team also termed the transmission and distribution system of these distribution companies as “outdated and ineffective”.

Mr Saddozai said the electricity situation was also not good in Hesco and Sukkur Electric Power Company (Sepco). He said a team was currently investigating power outages in the Peshawar Electric Supply Company area.

In its petition, the Central Power Purchasing Agency (CPPA) sought Rs1.90 per unit cut in tariffs because of lower fuel prices in May than estimated last year. It said the actual pool of fuel charge for the month of May was Rs4.88 per unit against the reference fuel cost component of Rs6.777 per unit. The actual fuel charges for the month thus dropped by Rs1.90 per unit.

The tariff adjustments were allowed under the monthly fuel adjustment that required a transfer of actual fuel cost of power generation to consumers. The change in electricity rates would not be applicable to agricultural consumers and residential consumers with less than 300 units of monthly consumption and KE.

The reduction in actual generation cost was mainly because of the dip in global oil and gas prices and favourable hydrological conditions. It was reported that the cheapest source — hydropower — contributed about 30 per cent to the total generation, having no fuel cost at all.

Under the practice in vogue, the distribution companies are charging higher estimated fuel charge to power consumers that is later adjusted against actual cost in a subsequent month with the approval of the power regulator.

The CPPA said the actual generation cost was lower and hence extra money collected from consumers needs to be refunded through an adjustment in the next billing month under the automatic fuel pass through mechanism.

The total energy generated in the country from all sources stood at 11,023 gigawatt hours (GWh). The CPPA supplied 10,880 GWh to the distribution companies at a cost of Rs53.1bn.

The CPPA said that almost 30pc power generation came from furnace oil based plants at rate of Rs9.4 per unit which was the second highest share in total power generation after hydropower. The power generation of about 17.64pc was based on domestic natural gas at the rate of Rs4.43 per unit.

Another cheaper source of power generation was nuclear fuel at Re1.04 per unit and its contribution was about 4.4pc. Likewise, power production from regasified-liquefied natural gas contributed about 8pc energy at the rate of Rs7.1 per unit. Diesel based generation amounted to 3.69pc at a rate of about Rs14.7 per unit.

Published in Dawn, June 21st, 2017