ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Monday notified about Rs1.06 per unit increase in electricity rates for ex-Wapda distribution companies (Discos) to generate about Rs8.4bn additional revenue to troubled power sector.

The increase was allowed on account of monthly fuel cost adjustment (FCA) for electricity consumed in October and November 2020. This would be charged to consumers in the billing month of January. The tariff increase will be applicable to all consumers except lifeline consumers i.e. 50 units per month.

The regulator had conducted the public hearing on the subject on Dec 30 and questioned the justification for furnace oil and diesel-based expensive power generation. Nepra said that it would announce its judgment after detailed analysis of record and data. The Discos had demanded Rs1.53 per unit increase in electricity rates with expected revenue of Rs12.5bn.

In its order issued on Monday, Nepra said that prima facie, certain efficient power plants were not fully utilised and instead energy from costlier residual fuel oil (RFO) and high speed diesel (HSD) based power plants was generated to the tune of over Rs2.011bn. This included Rs1.88bn on account of RFO and Rs131m from HSD-based power plants during the month of October 2020.

The regulator said it had been directing National Power Control Centre/National Transmission & Dispatch Company (NPCC/NTDC) and the Central Power Purchasing Agency (CPPA) repeatedly to provide complete justification in this regard, to the satisfaction of the regulator and submit complete details for deviation from economic merit order (EMO), showing hourly generation along with the financial impact for deviation from EMO.

The order said that although NPCC/NTDC provided details of plants operated on RFO and HSD with reasons thereof but Nepra’s in-house analysis workings were done to work out the financial impact of EMO deviations. This assessment found the net amount deductible from the overall claim due to EMO deviation owing to shortage of regasified liquefied natural gas (RLNG), technical constraints and underutilisation of efficient plants at Rs863m. Therefore, the regulator decided not to allow the said amount in the fuel cost adjustment until NPCC/ NTDC and CPPA-G provide complete details along with complete justification.

Therefore, after incorporating the said adjustments, the regulator has allowed Rs1.06 per unit fuel cost, including costs arising out due to application of various factors as provided in the respective PPAs of the Power Producers and claimed by CPPA-G in its monthly FCAs.

However, the amount arising out of application of above PPA factors, for the six RFO-based independent power producers (IPPs), incorporated under the 2002 Power Policy, has been allowed on provisional basis and shall be subject to adjustment, based on the final outcome of the ongoing suo moto proceedings against the RFO-based IPPs.

Therefore, it approved fuel price adjustment of 29 paisa per unit, having impact of Rs2.9bn for October and 77 paisa per unit increase, having an impact of Rs5.5bn for November.

The CPPA had requested on behalf of the Discos an increase of 57 paisa per unit, having impact of Rs5.6bn for the month of Oct 2020, and about 96 paisa per unit increase, having impact of Rs6.9bn for the month of Nov 2020.

Total energy generation from all sources in October was recorded at 10,242 gigawatt hour (GWH) at a total fuel cost of Rs42.2bn at the rate of Rs4.11 per unit. After accounting for 2.64pc transmission losses, about 9.972 GWH energy was delivered to Discos at Rs43.2bn at the rate of Rs4.33per unit.

In comparison, total energy generation in November was recorded at 7,479 GWH at a total fuel cost of Rs25.6bn at the rate of Rs3.42 per unit. Losses increased during this month from 2.64pc in October to 3.26pc in November. After accounting for transmission losses, only 7,235 GWH energy could be delivered to Discos at Rs24.9bn at the rate of Rs3.35 per unit.

The data showed that hydropower generation contributed the highest share of 31pc to the power grid which increased to 40pc in November.

Published in Dawn, January 12th, 2021