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ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Wednesday hinted at refunding Rs 4.4 billion to domestic consumers of Distribution Companies (Discos) who consumed over 300 units in April 2021 under the monthly fuel adjustment mechanism amid a fiery discussion on the need for conducting a special audit of National Power Control Centre (NPCC) for violating economic merit order and not rectifying constraints.

This was announced by Nepra Chairman, Tauseef H. Farooqi, at a public hearing on a request of Central Power Purchasing Agency Guaranteed (CPPA-G) to approve a refund of Paisa 84 per unit for the consumers of Discos overcharged in April 2021 under the FCA mechanism. Nepra will announce its decision on Friday (tomorrow) so that Discos can use the revised tariff in their billing cycle.

Nepra's technical team noted that the actual fuel charge component in April 2021 was Rs 5.7483/kWh against reference fuel charge component of Rs 6.6087/kWh, suggesting a decrease in tariff of Paisa 86.03/kWh. However, M&E section of Nepra recommended a penalty of Rs 159.21 million or (Paisa 1.56 per unit) to NPCC for not using LNG-based power plants in April 2021 despite having a sufficient RLNG quota, after which a reduction of Paisa 87.59 per unit was proposed.

However, Nepra which had deducted over Rs 7 billion of NPCC on deviation from economic merit order, decided to pay back Rs 4.473 billion for September, October and October 2020, after verification of documents, the per unit impact of which is Paisa 43.88/kWh.

After allowing previous adjustments, the net reduction has been calculated at paisa 43.71/kWh, cumulative impact of which will be Rs 4.4 billion against CPPA-G's recommended reduction of Rs 8.5 billion. Domestic consumers who used up to 300 units in April 2021 and agriculture consumers will not get any financial benefit from this reduction.

During the course of hearing, a long discussion was witnessed between Nepra, NPCC and CPPA-G on the operation mechanism of power plants.

NPCC officials who were on Zoom contended that LNG is not available for plants as per the agreed schedule due to which expensive plants are operated. They also claimed that SNGPL does not supply LNG at the time of peak demand. For June, SNGPL has not met the LNG demand.

They argued that this point needs to be understood by the official of Nepra who is dealing with economic merit order.

NPCC official proposed that the System Operator is ready to train the official at his office so that there should be no confusion on operations of plants. NPCC raised doubts on the capacity of incumbent official of Nepra who investigates violation of merit order. CPPA-G Chief Financial Officer recommended that any penalty on CPP-G be deducted from NTDC use of system charges due to NPCC's failure to improve its transmission system and not running economic power plants. He also suggested the special audit of NPCC.

Nepra Chairman gave two options to NPCC, saying either depute a technically sound officer in Nepra to verify its own claims of system operations or be ready for two year special audit so that faults can be determined.

According to the data submitted to Nepra, in April 2021, hydel generation recorded at 2,572, 58 GWh which constituted 24.55 percent of total generation in the entire month. Power generation from coal-fired power plants was 2,439,88 GWh (23.28 percent of total generation) at a rate of Rs 8.00 per unit, no generation from HSD, RFO- 147.85 GWh( 1.47 percent of total generation) at Rs 12 per unit.

Electricity generation from gas-based power plants was 1,278 GWh (12.19 percent) at Rs 7.4599 per unit, RLNG- 2,571, 55 GWh (24.54 percent of total generation) at Rs 9.8889 per unit, nuclear - 1,067 GWh at Rs 1.1052 per unit (10.18 percent of total generation), and electricity imported from Iran was 44.84 GWh at Rs 9.4093 per unit.

The price of mixed generation i.e. from different sources was 22.74 GWh at a price of Rs 5.3932 per unit, generation from baggasse recorded at 71.18 GWh at Rs 5.9822 per unit.

The energy generated from wind was recorded at 197.30 GWh, 1.88 percent of total generation and solar at 68.03 GWh, 1.88 percent of total generation in April 2021.

The total energy generated recorded at 10,481 GWh, at a basket price of Rs 5.5747 per unit. The total cost of energy was Rs 58.428 billion. CPPA-G also sought supplemental charges of Rs 1.132 billion. The sale to IPPs was also reduced by 27.32 GWh, the price of which was Rs 763 million while the reduction in transmission losses recorded at 260 GWh.

According to the CCPA-G data, net electricity delivered to Discos in April was 10,193,56 GWh at a rate of Rs 5.7680 per unit, total price of which was Rs 58.797 billion.

CPPA-G in its tariff petition maintained that since the reference fuel charges for April 2021 were estimated at Rs 6.6087 per unit whereas the actual fuel charges were Rs 5.7680 per unit, hence a reduction of Rs 0.84 per unit has been sought.

Copyright Business Recorder, 2021

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