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ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has allowed K-Electric (KE) to increase tariff by Rs 4.80 per unit to recover additional Rs 7.862 billion from consumers for the month of March 2022 under FCA mechanism.

KE, in its FCA adjustment request had sought positive adjustment of Rs 5.275 per unit having an impact of Rs 8.592 billion.

The FCA adjustment to be recovered in the bills of June 2022 shall be applicable to all the consumer categories except lifeline consumers.

The Authority during the hearing held on April 27, 2022, noted that the Power Purchase Agreement (PPA) was signed between NTDCL and K-Electric on January 26, 2010 for five years for sale/purchase of 650MW on basket rates.

Subsequently, a decision was made by the Council of Common Interests (CCI) in its meeting held on November 8, 2012 with respect to the modalities for withdrawal of electric power from NTDCL by the petitioner, wherein it was decided to reduce the supply of energy by 300MW from NTDCL to K-Electric.

However, the decision of the CCI has been impugned by way of suits/petitions by K-Electric in the High Court of Sindh. No new agreement has been signed between K-Electric and NTDCL till date, and K-Electric is continuing to draw energy from the national grid, which at present is around 1100MW.

Tanveer Barry representing KCCI submitted that high FCAs have a detrimental impact on the industrial consumers of KE.

Aneel Mumtaz inquired about the basis for change in the rate of energy purchased from CPPA-G. It was explained that KE had initially requested cost of energy purchased from CPPA-G on the basis of Fuel Cost Component of February 2022, as the rate for March 2022 was not available. Subsequently, K-Electric revised its request based on the FCA request of CPPA-G in the matter of DISCOs for the month of March 2022.

Arif Bilwani during the hearing submitted that many plants owned by KE are being run on old provisional heat rates, which need to be updated. He further added that KE should buy more electricity from CPPA-G being cheaper than its own generation. K-Electric, in its adjustment requests, certified that it despatches as per Economic Merit Order (EMO) from its own generation units (with the available fuel resources) and import from external sources. It also certified that the cost of fuel and power purchase claims do not include any amount of late payment surcharge/mark-up/interest.

K-Electric provided the plant wise generation statistics sheet, signed by K-Electric employees. The plant wise statistic sheets provide information in terms of plant capacity, actual units generated, actual auxiliary consumption, net generation and bus-bar sent outs, actual heat rates, fuel consumption and cost of fuel and generation cost per unit.

In addition, K-Electric also provided copies of invoices raised by fuel suppliers and copies of invoices raised by IPPs. K-Electric, although filed a motion for leave for review against the Authority’s decision of September 02, 2020, however, it has not yet been decided by the Authority. Therefore, for the purpose of adjustment K-Electric has used the heat rate of 8,377 BTU/kWh, as allowed in the decision of September 02, 2020.

The Authority observed that K-Electric has requested an amount of Rs213.32 million for operation of KCCPP on HSD during March 2022. The Authority for the purpose of adjustment has provisionally considered the same amount i.e. Rs213.32 million, as requested by K-Electric, based on heat rate of 7,950.183 btu/kWh (at 100% as given in heat rate report by KE), with same CV of HSD and auxiliaries as reported by KE. Any adjustment, once the Authority approves the heat rate/auxiliaries of KCCPP on HSD, and on account of CV would be adjusted subsequently along-with cost allowed previously.

Copyright Business Recorder, 2022

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