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Power tariff reduced by Rs2.21 per unit

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday cut electricity tariff by 2.21 per unit for all distribution companies except for privatised K-Electric that was provisionally allowed to charge about 40 paisas per unit more from its consumers.

The tariff adjustments were allowed after public hearings under monthly fuel adjustment that required 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.

The public hearing once again brought to limelight the inability of the two major power projects Nandipur and Guddu Power to positively contribute to the national energy supply on a sustainable basis because of their problematic operations.
KE consumers to pay 40 paisas more

For example, it was reported that the 425-525MW Nandipur Power Plant, which remained in the media limelight for the last five years for all the wrong reasons, had been running only on two per cent capacity of the total power generation. “It was also disclosed that 747MW efficient Guddu Power Plant was also operating sub-optimally like the Nandipur plant due to frequent problems in its compressors,” an official who attended the hearing said.

This was a cause of concern for the regulator, which is now working under the administrative control of Ministry of Water and Power. It observed that it was unfortunate that an efficient power plant like Guddu had become a burden. As a consequence, the regulator declined to allow full pass-through of its fuel cost and directed the Central Power Purchase Agency (CPPA) to take up the matter with the power ministry.

The CPPA, on behalf of the all distribution companies of ex-Wapda, had sought Rs1.85 per unit reduction in tariff but Nepra approved Rs2.21 per unit cut because of some cost disallowances for the Guddu plant.

The CPPA had sought fuel adjustment of Rs4.5 billion for the Guddu plant but the regulator calculated the required increase on this ground at Rs2.2bn. Therefore, Rs2.21 per unit refund to consumers for power consumed in December 2016 instead of Rs1.85 per unit demanded by the petitioner.

The reduction in actual generation cost was mainly because of dip in global oil prices and better energy mix. Under the current practice, 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 adjustment in the next billing month under automatic fuel pass-through mechanism.

It was reported that the fuel cost of electricity delivered to distribution companies stood at Rs37bn at an average cost of Rs6.24 per unit in December against the reference price of Rs8.104 per unit, which suggests that consumers were entitled to reimbursement of Rs1.86 per unit.

The total energy generated in the country from all sources stood at 7,199.66 gigawatt hours (GWh) in December at a cost of Rs37bn. The CPPA supplied 6,982.12 GWh to distribution companies at a cost of Rs43.59bn. The power firms in turn faced a net loss of 212.68 GWh, accounting for 2.95pc of total energy supplied.

The CPPA said that almost 37pc power generation was produced through plants running on furnace oil at rate of 8.65pc, which was the highest share in total power generation. The share of power generation through hydroelectric resources dropped to 23pc 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. As a consequence, these two domestic sources together contributed almost 50pc of energy.

Another cheaper source of power generation was nuclear fuel at 60 paise per unit and its contribution was about 6pc or 441 million units. Likewise, power production from regasified-liquefied natural gas contributed about 4.1pc share (or 296 million units) at an average cost of Rs7.04 per unit. Another saving was on account of about 0.9pc power generation from plants using high-speed diesel that cost Rs12.04 per unit.

K-ELECTRIC: The Karachi-based power utility had sought increase in power tariff by 40 paise per unit. The power regulator expressed concerns over increase in power tariff sought by the K-Electric. The officials of K-Electric informed during the public hearing that they had to operate plants on furnace oil due to unavailability of gas.

When the power regulator asked why it operated plant on furnace oil instead of gas, K-Electric officials said that only the Sui Southern Gas Company Ltd was better placed to explain short gas supplies. The regulator allowed provisional increase of 40 paise per unit and formed a committee to probe why it operated plants on furnace oil. The regulator observed that if gas was not provided due to non-payment of dues, K-Electric would be held responsible for producing expensive electricity through furnace oil.

National Transmission and Despatch Company’s Manager Technical Nisar Akhtar informed during the public hearing that K-Electric was getting 650MW electricity from the national grid at cheaper rates but was charging higher rates from its consumers.

He requested the regulator to stop this supply of electricity from the national grid. The power regulator members inquired whether it was his personal opinion or it was an official argument.

He said that it had been brought in notice of higher authorities. The regulator directed to provide 330MW electricity to K-Electric in line with decision of the Council of Common Interests.

Courtesy : Dawn News

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