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ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) on Tuesday increased tariffs of power Distribution Companies (Discos) by Rs2.53 per unit for September 2201 to recover Rs34 billion under monthly Fuel Component Adjustment (FCA) mechanism.

This raise will be in addition to Rs1.68 per unit increase in base tariff for domestic consumers across the country.

According to a notification, the increase will be applicable on all categories of consumers except lifeline consumers of Discos. The adjustment will be reflected in the bills of November 2021. Vice Chairman NEPRA, Rafique Ahmad Shaikh has written a dissenting note on failures of CPPA-G and NPCC in complying with the directions of the regulator.

He maintained that CPPA-G again failed to submit the segregation of financial impact into heads like: (i) impact on account of fuel (RLNG); (ii) system constraints; and (iii) underutilization of efficient power plants. As reported by Monitoring & Enforcement (M&E) wing, the financial impact on account of shortage of fuel (RLBFG) only is more than Rs 1 billion.

“The cost of mismanagement can’t be passed on to the consumers,” he said, adding that huge amount under the heads of “previous period adjustment” is also alarming and can’t be ignored due to its financial impact.

The Authority also observed that CPPA-G has purchased energy of 48.269 GWh from Tavanir Iran in September 2021 at a cost of Rs.633 million. The Authority also observed that CPPA-G has filed its request with the Authority for approval of extension of contract between CPPA-G and Tavanir Iran for import of power up to 104 MW for the period from January 01, 2020 to December 31, 2021, which is under consideration of the Authority due to which the cost of electricity purchased from Tavanir Iran is being allowed strictly on provisional basis, subject to its adjustment once the Authority decides the extension in the contract between CPPA-G and Tavanir Iran.

The cost being allowed on provisional basis is to avoid piling up of the cost and one-time burdening of the consumers in future.

CPPA-G also claimed amount of Rs.10.062 billion on account of previous adjustments for the month of September 2021. However, the Authority verified the amount of Rs.10.018 billion, which has been included in the monthly FCAs of September 2021. The difference of Rs.30.169 million is on account of previous adjustment claimed for Tavanir Iran, which has not been considered and would be accounted for only once the Authority decides the PAR submitted by CPPA-G in this regard. The difference of Rs.14.071 million is due to difference in technical factors provided by CPPA-G vis-à-vis technical factors verified by NEPRA.

As per the data submitted by CPPA-G, Discos purchased 16.18 GWh from Captive Power Plants (CPPs) during September 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.75.051 million which has been considered while working out the FCA of September 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.19.233 million during September 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 that the operation of power plants on RFO/HSD is due to increase in demand, outage of HBS and non-availability of RLNG as per requirements. NPCC explained RLNG quota allocated to power sector around 650 MMCFD while their requirement was more 900 MMCFD. Representative of ministry of energy (MoE) while explaining the reason for less allocation of RLNG submitted that RLNG terminal1 was on dry docking from September 14-17. Representative of MoE also explained that out of 1200 MMCFD RLNG on both terminals around 800mmcfd is allocated to SNGL and same is distributed based on their merit order to power sector, fertilizer and CNG sector, thus there is a supply constraint. Upon inquiry MoE representative explained that domestic sector is top priority and power sector is second on the list.

Based on the submission the Authority inquired if SNGL quota is only 800 MMCFD then how can it meet demand of 950 MMCFD. MoE while agreeing with Authority said till addition of new terminals the supply issue while remain. Representative of CPPA-G explained that SNGPL has firm supply agreement with only QATPL, HBS and Balloki power plants, and for others it provides RLNG on as and when available basis. Due to non-firm contract with other RLNG based power plants SNGPL cannot plan its procurement of RLNG.

The Authority inquired as to what it should do with the delta due to non-availability of RLNG, CFO CPPA-G explained in case of firm contract in the event of less demand power plants would be getting RLNG which also results in a delta for consumers as in that case we need to pay the cost of firm RLNG supply cost. On the issue non-firm contract, the Authority said that in this case, SNGPL can procure RLNG based on spot market if Power Division places its demand to Petroleum Division.

The Authority also questioned the performance of NTDC regarding removal of technical constraints. Upon inquiry NPCC explained that they are working on the constraints, aggressively, which is evident from fact that load shedding due to constraint as compared to previous year has reduced by 25 per cent.

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.785.64 million

The Authority has decided to deduct this amount provisionally 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, while reviewing the FCA claim, the Authority observed that Partial Load was provided to Balloki, HBS and QATPL power plants even during Forced Outages and Failure to Achieve Despatch (FADL), which is non-performance/fault of the said power producers. The Authority is of the considered view that Part Load can only be provided if the Plant is available but NPCC despatches it on part load due to system requirement. Similarly, Part Load cannot be provided in the case of failure of the plant to achieve the despatch instructed by the NPCC. Therefore, an amount of Rs. 30.92 million (Rs. 26.27 million for Balloki, Rs. 04.17 million for Bhikki and Rs. 0.48 for HBS) for the month of August 2021 has been deducted on account of Partial Load charges, while working out the FCA of August 2021.

According to NEPRA, the amount arising due to application of PPA factors, for the six RFO based IPPs, incorporated under 2002 Power Policy, is being allowed on provisional basis and shall be subject to adjustment, based on the final outcome of the ongoing suo moto proceedings against RFO based IPPs.

NTDCL, reported provisional T&T losses of 357.18 GWh, i.e., 2.56% based on energy delivered on NTDCL system during September 2021 i.e. 13,952 GWh. NTDC in addition also reported T&T losses of 19.99 GWh for PMLTC (HVDC) line.

The Authority, after incorporating the aforementioned adjustments has reviewed and assessed an increase of Rs.2.5272/kWh in the applicable tariff for Discos on account of variations in the fuel charges for the month of September 2021.

Copyright Business Recorder, 2021

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