The National Electric Power Regulatory Authority (Nepra) has approved an increase of Rs4.7446 per unit in the power tariff, allowing Ex-WAPDA Discos (XWDISCOSs) to collect an additional Rs61 billion from consumers through December’s bills.
Nepra issued a notification on Thursday, stating that the increase has come about due to monthly Fuel Charges Adjustment (FCA) for October 2021 owing to excessive use of refined furnace oil (RFO), high-speed diesel (HSD), and liquefied natural gas (LNG) in power generation.
On November 30, Nepra conducted a public hearing on the CPPA-G petition for monthly FCA with Chairman Tauseef H Farooqi in the chair and had reserved the judgment.
In the petition submitted to Nepra on behalf of XWDISOCs, CPPA-G stated that for the month of October 2021, the reference fuel charges from the consumers were Rs5.1733 per unit while the actual fuel cost was Rs9.9261 per unit. Therefore, it should be allowed to pass the increase of Rs4.7528 per unit on to the consumers.
The decrease in hydel, wind, bagasse, and solar generation led to the use of expensive fuel such as HSD, RFO, and LNG during October which increased the generation cost.
The regulator was told that excessive use of RFO also made electricity expensive. The electricity generated from RFO during October rose to 1,228.66 GWh from 997.44 GWh in September at the cost of Rs21.2273 per unit.
The generation from HSD increased from 2.34 GWh in September to 57.10 GWh in October. The cost of electricity generated from HSD was Rs25.2250 per unit.
As per the in-house analysis workings, it has been noted that around 1,228 GWh was generated from RFO and 57 GWh using HSD during the month of October 2021, whereas the capacities of RLNG, coal and gas-based efficient power plants were underutilized.
The net amount deductible, on a provisional basis, from the overall claim due to deviation from Economic Merit Order (EMO) due to underutilization of efficient power plants works out at around Rs63.42 million.
Nepra decided to “deduct this amount provisionally in the instant FCA until NPCC, NTDC and CPPA-G provide the required details along with complete justification in this regard to the satisfaction of the authority”.
NTDCL, reported provisional T&T losses of 245.31 GWh based on energy delivered on NTDCL system during October 2021. The NTDC, in addition, also reported T&T losses of 20.55 G\Vh for PMLTC (HVDC). The NTDCL is allowed T&T losses of 2.80% only at 500KV and 220KV network, while PMLTC (HVDC) is allowed T&T losses of a maximum up to 4.3%.
The authority has reviewed data provided by the CPPA-G and due diligence is done accordingly. From a perusal of the information so provided by the CPPA-G, the actual pool fuel cost for the month of October 2021 is Rs9.9261 per unit, against the reference fuel cost component of Rs5.1733 per unit of the notified consumer-end tariff of XWDISOCs for the FY 2019-20.
The actual fuel charges, as reported by the CPPA-G, for the month of October 2021 increased by Rs4.7528 per unit as compared to the reference fuel charges.
During the hearing, the authority also observed that prima facie, certain efficient power plants were not fully utilized, and instead energy from costlier RFO/HSD-based power plants was generated to the tune of over Rs27,521 million during the month of October 2021.
The authority has been directing NPCC/NTDC and the CPPA-G repeatedly to provide complete justification in this regard, to the satisfaction of the authority and submit complete details for deviation from the EMO, showing hourly generation along with the financial impact for deviation from it, if any, and the reasons, thereof.
However, Nepra decided that the actual FCA for October 2021 was Rs9.9179 per unit against the Corresponding Reference Fuel Charge Component of Rs5.1733 per unit. Therefore, Nepra allowed an increase of Rs4.7446 per unit. The total impact of the tariff hike will be around Rs61 billion (FCA plus 17 percent GST).
The increase shall be applicable to all the consumer categories except lifeline consumers and XWDISCOs shall reflect the fuel charges adjustment in respect of October 2021 in the billing month of December 2021.