Power tariff increased by 39 percent

National Electric Power Regulatory Authority (Nepra) has increased electricity tariff of Discos' by Rs 3.03 or 39 per cent per unit across the board except lifeline consumers using up to 50 units per month under the monthly fuel adjustment formula. Shaukat Ali Kundi, a member from Balochistan has written a dissenting note on the tariff determination and commented that the notification should have been titled as "revised decision".
According to a notification, Nepra allowed an increase in power tariff in August last year but did not notify it because of stay orders issued by different courts. The notified increase will be adjusted in the coming months' bills. Nepra argues that Discos had been directed to comply with the orders of the High Courts' strictly and in case of non- compliance of orders the Discos concerned would be held responsible for violating/defying the orders.
The notification says that pursuant to the provisions of section 31(4) of the Regulation of Generation, Transmission and Distribution of Electric Power Act 1997, (XL of 1997), the Authority has to review and revise the approved tariff on account of any variation in the fuel charges on a monthly basis. Accordingly the Authority after conducting hearing on 14th October 2011 at Nepra's main office gave its decision.
Three members of the Authority gave a dissenting view on the following issues: (i) Karkey rental power plant partial operation; (ii) inclusion of cost of wind energy; (iii) operation of low efficiency/high cost Gencos' plants of SPS Faisalabad Unit 1-2 and NGPS Multan Unit 1&3; and (iv) underutilisation of KESC's Bin Qasim plant.
In view of the dissents of the three members, the decision could not be notified therefore the Authority decided to reconsider its decision. The issues were thoroughly re-examined and discussed in Regulatory meeting on February 17, 2012. The Authority further considered that in the current scenario when demand supply gap was increasing even disallowing fuel cost of electricity generated by Karkey and cost of wind energy would further increase the shortfall which would result in disrupting economic activities.
The Authority considered that it was not in the interest of the consumers to disrupt the available electricity which in the current scenario was minimising the demand-supply gap.
While deciding the fuel charges adjustment, from the perusal of the information so provided by CPPA, it has been observed that the actual fuel charges of Rs 6.6618/kWh for the month of August 2011 increased by Rs 3.0605/kWh as compared to the reference fuel charges, ie Rs 3.6013/KWh as indicated in the Authority's determination pertaining to the 1st quarter of FY 2010-11.
The Authority noted that CPPA charged Rs 744.676 million as fuel cost for Karkey Rental Power Plant for 48.568 GWh energy delivered during August 2011. The fuel price adjustment request with respect to Karkey Rental Power Plant is pending before the Authority. However, under Rule 4(7) of Tariff Standards & Procedure Rules 1998, the Authority while admitting a petition, allowed the immediate application of the proposed tariff subject to an order for refund for the protection of consumers, or for satisfactory security to be provided for refund, while the proceedings are pending before the Authority.
In view thereof, the Authority has decided to pass on, provisionally, to the consumers the fuel cost regarding energy generated by Karkey Rental Power Plant subject to the condition that the fuel cost will be adjusted in the succeeding period, if required, in accordance with the decision of the Authority regarding the pending fuel price adjustment of Karkey Rental Power Plant.
Lakhra Power Generation Company (LPGCL) and Central Power Purchasing Agency (CPPA) have been directed to adjust the amount of the outstanding fuel charges against penalties imposed on Karkey Rental Power Plant due to delayed COD and advance rent and unless such penalties and advance rent are offset, no payment be made to Karkey Rental Power Plant.
As per details provided by CPPA 39.695 GWh, amounting to Rs 396.948 million, were purchased under the head of mixed energy during August 2011. According to CPPA, energy was purchased from 11 small captive and new captive power plants out of which four p1ants operated on furnace oil, one on bio-gas and six on pipeline quality gas. According to the Interim Power Procurement (Procedures & Standards) Regulations 2005, filing of power acquisition requests in respect of energy purchased from small, captive and new captive power plants is mandatory. Discos' have been directed to file power acquisition requests in respect of all small, captive and new captive power plants with whom they have Power Purchase Agreements (PPAs).
The Authority has already initiated the proceedings for approval of contracts in respect of power acquisition requests of HESCO for Anoud Textile Mills Limited and Omni Power Private Limited and in respect of power acquisition requests of FESCO for Sitara Energy Limited, Kohinoor Power Company Limited and Galaxy Textile Mills Limited. The Authority has decided to provisionally allow the cost of energy purchased from small, captive or new captive power plants who are licencees of Nepra except Gadoon Textile Mills Limited who is not a licence. Therefore, the cost of Rs 94,977,949/- as submitted by CPPA for 6,374,359 kWh energy delivered by Gadoon Textile Mills Limited to PESCO during August 2011 having an impact of Rs 0.0100/kWh has been disallowed to be passed on to the consumers.
The cost of energy allowed provisionally in respect of all other 10 small, captive and new captive power plants will be subject to adjustment on the basis of tariff determined/approved by the Authority on case to case basis. The Authority also noted that during August 2011 NTDC claimed 2.75% transmission losses against the determined losses of 2.50% as per the Authority's determination of January 6, 2006. The Authority considered that the claimed transmission losses by NTDC are not consistent with the Authority's determination hence cannot be passed on to the consumers.
The Authority has, therefore, decided to restrict the NTDC losses to 2.50% in accordance with its determination; accordingly the impact of Rs 0.0177/kWh on this account is being disallowed to be passed on to the consumers. The Authority has reviewed and assessed an increase of Rs 3.0329/kWh in the applicable tariff for ex-Wapda Discos on account of variations in the fuel charges for the month of August 2011.
The assessed fuel charges adjustment of Rs 3.0329/kWh for month of August 2011 is higher by Rs 0.99/kWh than the adjustment of Rs 2.0429/kWh for month of July 2011; therefore, effectively there will be an increase of Rs 0.99/kWh in the bill of the consumers on account of fuel charges adjustment as compared to the month of July 2011. This increase will also have impact of KESC as the latter procures power from Hubco being supplied by the NTDC.