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Tariff for Discos cut by Rs3.95

Tariff for Discos cut by Rs3.95

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday cut fuel based power tariff for distribution companies of ex-Wapda by Rs3.95 per unit for one month and increased base tariff by up to Rs1.25 per unit for a year.

At a public hearing presided over by Vice-Chairman Himayatullah Khan, the Nepra concluded that the distribution companies had charged 52 per cent higher rates of Rs7.62 per unit on account of fuel cost to consumers in April which should be refunded. In doing so, the regulator held that Rs3.95 per unit (Rs30 billion) should be returned to the consumers in July.

The Central Power Purchase Agency (CPPA) which had filed request for monthly fuel price adjustment (FPA) also put on record that furnace oil based power generation continue to be cheaper than gas based generation because of imported regasified liquefied natural gas (RLNG) factor.
Nepra increases hydropower tariff for payment of Rs70bn to KP

The reduced rates would not be applicable to all agricultural and domestic consumers using less than 300 units per month under a decision of the PML-N government that this was already a subsidised segment of population. Likewise, consumers of K-Electric would also not benefit from this relief.

The CPPA had solicited Rs3.42 per unit reduction in fuel based power tariff for April saying the actual cost stood at Rs4.21 per unit against reference tariff of Rs7.62 per unit. The regulator, however, disallowed a couple of items claimed by the CPPA and approved Rs3.95 per unit cut.

On a couple of questions from the Nepra vice-chairman, National Transmission and Desptach Company (NTDC) General Manager Mohammad Ilyas and CPPA General Manager Mohammad Rehan conceded that merit order was not followed in April to accommodate RLNG based power generation despite availability of cheaper furnace oil based plants which were not run to full capacity.

They said the furnace oil-based generation had dropped by 13pc in April against 10pc increase in RLNG based power production.

Mr Himayatullah expressed displeasure that consumers had been denied a relief of Rs4bn in April by not utilising furnace oil based plants and instead producing energy from RLNG. Nepra’s member Sindh Syed Masoodul Hassan Naqvi also deplored that power companies did not care for the interests of the consumers.

The CPPA reported that furnace oil based power generation cost stood at Rs5.38 per unit compared to gas based costs of Rs5.73 per unit and Rs11.85 per unit for diesel based plants, no fuel cost for hydropower plants and Rs1.16 per unit of nuclear plants. The fuel cost of electricity imported from Iran stood at Rs10.6 per unit.

The CPPA reported that a total of 7.63bn units of electricity were supplied to distribution companies in April at a total cost of Rs32bn. It said the hydropower generation contributed about 30.5pc while furnace oil based plants generated over 28.8 per cent energy. Gas-based plants generated 32.3pc electricity for the national grid followed by 5.39pc of Nuclear and 0.17pc by diesel plants.

BASE TARIFF: Separately, the Nepra approved Rs1.25 per unit increase in hydropower tariff for Wapda to ensure payment of Rs70bn to Khyber Pakhtunkhwa on account of net hydel profit. As a consequence, the overall hydropower tariff would now increase to Rs4.05 per unit with effect from July 1, 2016.

Under an agreement between the PML-Ns federal and PTI’s provincial government, the Nepra approved 79 paisa per unit increase to meet Rs25bn payment to the province as first instalment and 46 paisa per unit to generate Rs15bn for the second instalment. Both these instalments of Rs40bn would be paid during next fiscal year, resulting in Rs1.25 per unit increase in tariff.

However, the 79 paisa per unit charge would come to an end at the conclusion of fiscal year 2016-17 while the 46 paisa per unit charge would remain applicable until fiscal year 2019. The Nepra, however, disallowed building Rs1.875bn mark up to be charged to consumers.

Under an agreement signed by the federal and KPK and approved by the Council of Common Interest, Wapda would clear payment of Rs70bn net hydropower profit to the province in four years. The agreement required payment of Rs25bn to KPK this year but this could not be charged to consumers because of time limitations and hence Rs25bn were raised from banks at 7.5 per cent interest rate for payment.

The remaining arrears of Rs15bn would be paid every year until 2019.

Courtesy : Dawn News



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