ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Tuesday grilled Discos on backlog of 0.350 million new electricity connections, due to which general public is bearing the brunt of billions of rupees additional financial burden in the form of capacity payments.
The Authority gave this observation during re-hearing of petitions of Discos for quarterly tariff adjustment fourth quarter (April-June 2020) of fiscal year 2019-20. Discos had sought an increase of Paisa 85 per unit in their tariffs to recover Rs 85.202 billion.
Presided over by Vice Chairman, Nepra, Saif Ullah Chattha, the hearing was also conducted by Member Sindh, Rafique Ahmad Shaikh. Nepra's experts assisted the Authority in technical matters.
According to the revised petitions, Islamabad Electric Supply Company (Iesco) sought Rs 7.847 billion for 4th quarter of 2019-20, of which Rs 7.717 billion is on account of PPP, Rs 136 million O&M, Rs 230 million UoSC & MoF with reduction of Rs 163 million T&D losses on monthly FPA.
Lesco has claimed Rs 19.093 billion, Gepco, Rs 8.394 billion, Fesco, Rs 10.876 billion, Mepco, Rs 15.147 billion, Pesco, Rs 10.619 billion, Hesco,3.835 billion Qesco, Rs 6.068 billion and Sepco, 3.783 billion. However, Tesco has sought a reduction of Rs 460 million.
Of the total Rs 85.202 billion, claims of Rs 81.109 billion are related to Capacity Purchase Price (CPP), Rs 567 million variable O&M, Rs 2.270 billion on account of UoSC& MoF and a reduction of 1.249 billion on account of T&D losses on monthly FPA.
As the hearing started, Mr. Mubashir Ahmed, Director (Tariff) informed the Authority that during the previous hearing, held on November 24, 2020, officials of Discos and CPPA-G failed to explain the reasons for increase in capacity payment for the 4th quarter. Power Division, in a letter, requested the regulator to determine uniform tariff for all the Discos.
Chief Financial Officer (CFO), CPPA-G, Rehan Akhtar, informed the Authority that actual billing in the form of capacity payment, use of system charge and market operations fee have been passed on to the Discos as per the given mechanism. He said Discos have claimed actual system charges.
He further stated that Sukkar and Qesco wanted some further adjustments but he was unaware of the exact amount as he was not aware about their current status.
The Member Sindh, Rafique Ahmed Sheikh, remarked that when figures of both the Discos do not match during the public hearing then what can the regulator or the audience or general public believe? He remarked: "How can we inform the people that figures were changed at a later stage."
Nepra's experts, however, clarified that they would verify the figures shared by the Discos and CPPA-G. The Vice Chairman Nepra also supported the viewpoint of his colleague, saying that out of Rs 81 billion, there would be an amount that did not reflect electricity supplied to the consumers but they were charged for capacity payment.
The Member Sindh said that 350,000 connections are pending due to which payment of capacity increased. He said Lesco was on top of the list seeking capacity payment from consumers, adding that connections are delayed deliberately.
"Increase in capacity payment is due to incompetence of Discos. People are bearing the brunt of system's wrong doings," he added.
Referring to a question raised during the previous hearing, Rehhan Akhtar said that the Neelum Jhelum project, Sahiwal coal-fired power plant, China Hub Power Generation, Engro Power Thar, Port Qasim coal plant, wind and some solar plants had not been taken on base tariff, adding that when these projects were commissioned, their capacity was added on.
He further explained that the projects which were included in base tariff also have capacity issues. Port Qasim's capacity was Rs 19 billion which actually was Rs 67 billion and the accumulative capacity was considered to be Rs 68 billion, whereas during this period it was Rs 104 billion. In addition to capacity purchase price, a key factor which has substantial impact is the rupee-dollar parity. At the time of fixation of base tariff, rupee-dollar parity was projected at Rs 129 whereas it was Rs 168. 5 during the 4th quarter of fiscal year 2019-20.
"These are the factors due to which capacity payment is on the higher side," claimed CFO CPPA-G. Member Sindh, enquired from CEO Lesco as to how much new connections applications are pending with the Disco and was informed that the number of pending cases are about 22000 of which 220 applications are from the industrial sector.
The member observed that according to Nepra, pendency is in lacs, saying that if all the applications are entertained the capacity payment to power plants can be reduced which otherwise is being paid by the existing consumers. He further stated that it was "criminal negligence" that Discos are not giving new connections when general consumers are paying capacity on idle generation.
On the definition of pendency, a difference, however minor, of opinion was also witnessed between Member Sindh and CEO, Lesco. The Authority will go through the available record of CPPA-G and Discos prior to finalisation of quarterly adjustment.
Copyright Business Recorder, 2020