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Barring Karachi, power tariff cut by Rs3.6 per unit on fuel price adjustment

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday cut power tariff by Rs3.60 per unit on account of fuel price adjustment for November 2016.

The decision was taken at a public hearing chaired by Nepra Chairman Tariq Sadozai.

Following the tariff reduction, consumers of power distribution companies will enjoy a relief of about Rs24 billion.

However, K-Electric that serves Karachi consumers, agricultural consumers and domestic users, who consume less than 300 units per month, will not receive any benefit of the tariff cut as the government says they are already subsidised.

The relief will also not be passed on to industrial consumers that are getting cheaper electricity.

On the basis of production data, the Central Power Purchasing Agency (CPPA) had sought a tariff reduction of Rs3.60 per unit for November 2016 in its petition sent to Nepra.

Actual cost of power generation was calculated at Rs3.7033 per unit in the month compared to the reference price of Rs7.3040 per unit.

As the power distribution companies got an extra Rs24 billion in electricity bills because of the high reference price, it would be returned to the consumers following the regulator’s decision.

During the hearing, CPPA officials pointed out that of the Rs24-billion refund, power consumers would get a relief of Rs8.9 billion following a decline in global oil prices and receive refund of Rs15 billion due to improvement in the energy mix.

The CPPA said it did not purchase any electricity generated from coal and high-speed diesel in November and, therefore, it did not quote their prices in the petition.

Total power generation from hydel sources stood at 2,842.53 gigawatt-hours (GWh) in the month, constituting 41% of the total generation. However, hydroelectric power production has gone down massively since last week after slowdown in water releases from Tarbela and Mangla reservoirs in the wake of annual canal maintenance work.

The CPPA purchased 1,345 GWh of electricity produced from residual fuel oil, consisting of 19.39% of total generation, at a cost of Rs8.2 per unit whereas the cost of electricity generated from natural gas was estimated at Rs5.5 per unit.

From this source, 1,925 GWh of electricity was supplied to the CPPA, which accounted for 27.7% of the total generation.

The electricity generated with the help of re-gasified liquefied natural gas stood at 286 GWh, comprising 4.13% of the total generation and costing Rs6.9 per unit, which was Rs1.40 per unit higher than natural gas-based generation.

Nuclear power plants delivered 338 GWh at Rs1.18 per unit, the cheapest source amongst all fuels.

Pakistan imported 35 GWh of electricity from Iran in November at Rs10.63 per unit. About 55.99 GWh was produced through bagasse at a cost of Rs5.98 per unit and 45.3 GWh was provided by wind and solar power plants.

According to the petition, a total of 6,935 GWh were produced in November 2016 at a cumulative price of Rs24.8275 billion or average Rs3.5799 per unit. Net electricity supplied to the distribution companies was 6,839.93 GWh at a cost of Rs25.33 billion. Losses stood at 1.21%.


The regulator also held a hearing for the petition filed by K-Electric that sought a tariff increase of 60.16 paisa per unit, citing expensive power generation. However, the regulator reserved its judgment, saying the decision would be announced later.

In the petition, K-Electric said its fuel price variation in November 2016 in comparison to September 2016 was Rs249.115 million (20.627 paisa per unit) and the variation in power purchase cost was Rs477.445 million (39.533 paisa per unit).

Keeping that in view, the total adjustment was calculated at Rs726.560 million or 60.160 paisa per unit. The company pointed out that the cost of fuel and power purchase did not include any late payment surcharge, mark-up or interest.

courtesy : express tribune



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