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Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,344
1624hr
Pakistan Cases
1,267,393
56724hr
1.45% positivity
Sindh
466,945
Punjab
438,636
Balochistan
33,159
Islamabad
106,615
KPK
177,240

ISLAMABAD: National Electric Power Regulatory Authority (Nepra) Friday released two tariff determinations according to which it approved an increase of paisa 90 per unit in tariffs for first and second quarters of FY 2020-21 under quarterly tariff adjustment mechanism and a refund of paisa 64 per unit for March 2021, for all Discos under monthly FCA sans agriculture, lifeline and those domestic consumers who use up to 300 units monthly.

On March 30, 2021, on quarterly tariff adjustment requests, Discos explained their claims of Rs 91.65 billion (Paisa 91 per unit) as Quarterly Tariff Adjustment (QTA) for two quarters, ie, from July to September and October to December 2000.

Discos claimed Rs 44.709 billion as quarterly adjustment for July to September 2002, of which Rs 33.392 billion are on account of capacity purchase price, Rs 2.527 billion variable O&M, Rs 2.801 billion Use of System Charges (UoSC) and Market Operation Fee (MoF) and Rs 5.989 billion as impact of T&D losses on monthly Fuel Price Adjustment (FPA).

For second quarter i.e. October to December 2000, Discos have sought adjustment of Rs 46.658 billion, of which Rs 36.910 billion are on account of Capacity Purchase Price, Rs 2.661 billion variable O&M, Rs 3.789 billion UoSC & MoF and Rs 3.298 billion on account as impact of T&D losses on monthly FPA.

The data shared with Nepra indicates that Iesco has sought cumulative adjustment of two quarters of Rs 7.409 billion, Lesco Rs 21.113 billion Gepco, Rs 7.741 billion, Fesco Rs 8.397 billion Mepco Rs 13. 952 billion Pesco Rs 15.334 billion Hesco Rs 5.921 billion Qesco Rs 5.981 billion, Sepco Rs 6.834 billion and Tesco Rs 1.316 billion reduction. However, during the hearing a couple of Discos like Mepco and Qesco revised their figures.

Although, the proposed quarterly adjustments are formula based as per the already prescribed mechanism but the impact of any such adjustments has to be made part of the consumer end tariff, hence, the Authority, in order to provide an opportunity of hearing to all the concerned and meet the ends of natural justice, decided to conduct a hearing on the issue.

CPPA-G during the hearing submitted that Market Operation Fee, Use of System charges of NTDC and capacity charges of generation companies are billed to DISCOs as per the determinations/decisions of NEPRA. CPPA-G; and while justifying the instant adjustment request, submitted that the projected Power Purchase Price (PPP) references included in the notified base tariff, did not include capacity charges for certain power plants e.g. Neelum Jhelum Hydro, HSR (Sahiwal) Coal, China Hub Power Coal, Engro Power Gen Thar Coal, Port Qasim Coal and various Solar and Wind based power plants etc., as these plants were not operational at that time. However, subsequently these plants became operational and have accordingly started invoicing their capacity charges to CPPA-G, which is being reflected in the quarterly adjustment requests.

The Authority on the concerns raised by the commentators during the hearing regarding payment of capacity charges to power plants without fully utilizing their available capacities, observed that as per the Take Or Pay agreements with the IPPs, the Capacity is paid to the IPPs based on the availability of plants, irrespective of their utilization factor.

After detailed analysis of the figures and data provided by the CPPA-G, the Authority has worked out revenue of Rs 43.830 billion for first quarter of 2020-21 and Rs 46.183 billion for second quarter of 2020-21 totaling to Rs 90.013 billion.

The Authority has determined a uniform rate of Rs, 0.8966/kWh for the allowed amount of quarterly adjustments of Rs.90.013 billion pertaining to the first and second quarters of FY 2020-21, across each category of consumers of Discos (except lifeline consumers), based on projected sales for the FY 2019-20, after excluding there from the sales to life line consumers, to be recovered in twelve month period, starting from the date of its notification as summarized below.

The Authority in its decision of December 01, 2020, in the matter of Motion filed by the Ministry of Energy (Power Division) with respect to recommendations of Support Package for additional consumption and abolishment of Time of Use Tariff Scheme for Industrial consumers of Discos, decided that no quarterly adjustments would be passed on to Bl, B2, B3 and B4 industrial consumers to the extent of incremental sales till continuation of the instant package.

FCA: National Electric Power Regulatory Authority (Nepra) has approved a refund of Paisa 64 per unit to consumers of Discos for March 2021 under monthly fuel price adjustment mechanism.

However, lifeline consumers, domestic consumers consuming up-to 300 units and agriculture consumers of all the Discos are not eligible for this refund, as they are already getting subsidy. The refund will be given to eligible consumers in their bills of May 2021.

According to Nepra's decision, the Authority has reviewed the information provided by CPPA-G seeking monthly fuel cost adjustment (FCA) and due diligence is done accordingly. From perusal of the information so provided by CPPA-G, the actual fuel cost for the month of March 2021 is Rs.5.6146/kWh, against the reference fuel cost component of Rs.6.2295/kWh as notified in consumer-end tariff of Discos for the FY 2019-20. The actual fuel charges, as reported by CPPA-G, for the month of March 2021 decreased by Rs.0.6149/kWh as compared to the reference fuel charges.

On April 28, 2021, the Authority, from the data provided by CPPA-G, observed that fuel cost of certain power plants has not been claimed by CPPA-G as per the Authority's approved rate, accordingly, the same has been adjusted downward in line with the Authority's approved rates for the month of March 2021.

CPPA-G has included Rs.26.072 million on account of fuel cost for Kanupp-PAEC (K-2/ K-3 Project) for the month of March 2021 @ Rs. 1.19/kWh. The Authority observed that no fuel cost component of Kanupp-PAEC (K-2/K-3 Project) has yet been approved by the Authority, therefore, for the purpose of instant FCA, the fuel cost as claimed by CPPA-G has been considered provisionally subject to its adjustment once the Authority approves the FCC of Kanupp-PAEC (K-2/K-3 Project.

Similarly, CPPA-G also claimed negative amount of Rs.349 million on account of previous adjustments for the month of March 2021. However, the Authority verified it as negative amount Rs.375 million, which has been included in the monthly FCAs of March 2021.

Regarding adjustments claimed for Chanaar energy & Uch-IT, the amount claimed includes adjustments pertaining to March & April 2019, which requires detailed verification, therefore, would be considered once CPPA-G provides complete record in this regard.

As per the data submitted by CPPA-G, Discos purchased 20.884 GWh from Captive Power Plants (CPPs) during March 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.108.158 million. However, as per the Nepra approved mechanism, it worked out as Rs.108.143 million which has been considered while determining the FCA of March 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 based power plants was generated to the tune of over Rs.2,802 million during the month of March 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.

The Authority, after incorporating adjustments, has reviewed and assessed decrease of Rs.0.6434/kWh in the applicable tariff for Discos on account of variations in the fuel charges for the month of March 2021.

Copyright Business Recorder, 2021

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