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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved 64 paisa per unit increase in Discos tariffs for February 2021 under monthly fuel price adjustment formula.

However, the approved increase which will not be applicable to lifeline consumers and Karachi Electric (KE), will be recovered in the bills of April 2021.

CPPA-G sought an increase of Paisa 66 per unit, having financial impact of Rs 4.5 billion. However, the Authority has approved FCA of Paisa 64.16/ kWh, having impact of Rs 4.4 billion.

On March 30, 2021, Nepra reviewed the information provided by CPPA-G seeking monthly Fuel Cost Adjustment (FCA) and due diligence is done accordingly. From perusal of the information provided by CPPA-G, the actual pool fuel cost for the month of February 2021 was Rs.4.7987/kWh, against the reference fuel cost component of Rs.4.1414/kWh, which has been worked proportionately, based on the fuel references of the notified consumer-end tariff of Discos for the FY 2017-18 (which remained notified till February 11, 2021) and for the FY 2019-20 (notified, wef, February 12,2021), The actual fuel charges, as reported by CPPA-G, for February 2021 increased by Rs.0.6573/kWh, compared to the reference fuel charges of Rs.4.1414/kWh.

From the data provided by CPPA-G, the Authority observed that fuel cost of Nandipur power plant has not been claimed by CPPA-G as per the Authority's approved rates. Accordingly, it has been adjusted downward in line with the Authority's approved rates for the month of February 2021. Similarly, CPPA-G also claimed an amount of Rs.67.681 million on account of previous adjustments for February 2021. The same has been verified and included in the monthly FCAs of February 2021.

According to Nepra, monthly adjustment on account of fuel charges variation is made in pursuance of the provisions of section 31(7) of the Nepra Act, as well as on the basis of a mechanism formula already determined by the Authority in its annual tariff determinations for Discos, yet in order to meet the ends of natural justice and to arrive at an informed decision, the Authority decided to conduct a hearing in the matter. As per the data submitted by CPPA-G, Discos purchased 13.3 GWh from Captive Power Plants (CPPs) during February 2021, for which CPPA-G provided actual details of energy purchased from these plants. According to the details provided by CPPA-G, the actual fuel cost of this energy is Rs.62.65418 million. However as per the Nepra approved mechanism, it works out as Rs.62.6535 million and the same has been considered while determining the FCA of February 2021.

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 Rs.920 million during the month of February 2021. The Authority has been directing NPCC/NTDC & CPPA-G repeatedly to provide complete justification in this regard, to the satisfaction of the Authority and submit complete details for deviation from Economic Merit Order (EMO), showing hourly generation along-with the financial impact for deviation from EMO, if any, and the reasons, thereof.

NPCC/NTDC during the hearing, explained operation of power plants on RFO, however, the Authority observed that an in-house analysis has also been carried out, to work out the financial impact due to deviation from EMO based on the information submitted by NPCC. As per the in-house analysis/workings carried out, the net amount deductible, on provisional basis, from the overall claim due to deviation from EMO due to underutilization of efficient power plants works out as Rs.106.52 million. The Authority has decided not to allow this amount 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. Further CPPA-G/NPCC/NTDC is also directed as follows: (i) System Operator shall report to CPPA-G, within 24 hours, dispatch of generation plant(s) out of merit order along with reasons thereof. The copy of the report shall be sent to NEPRA simultaneously; (ii) CPPA-G shall share the report with the system operator and also submit it to NEPRA at the time of filing of monthly fuel price adjustment request; and (iii) CPPA-G shall scrutinize the dispatch report in terms of Scheduling and Dispatch Code (SDC) of Grid Code and prepare a report which shall comprise of (a) all dispatch deviation from merit order and (b) plants available but not dispatched and (c) dispatch deviation justified or unjustified in terms of SDC of Grid Code along-with their financial impact.

Accordingly, the Authority has calculated the fuel cost for the month of February 2021, after accounting for the adjustments, and including costs arising due to application of various factors, as provided in the respective PPAs of the Power Producers and claimed by CPPA-G in its FCA request. The amount arising out due to application of PPA factors, for the six RFO based IPPs, incorporated under 2002 Power Policy, has been allowed on provisional basis and shall be subject to adjustment based on the final outcome of the ongoing suo motu proceedings against FRO based IPPs.

NTDCL, reported T&T losses of 251.79 GWh, ie, 3.33% based on energy delivered on NTDCL system during February 2021. The same has however been verified as 3.3056%. Therefore, for working out the FCA of February 2021, T&T losses of 250.31 GWh have been considered.

Copyright Business Recorder, 2021


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