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ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has allowed power Distribution Companies (Discos) to increase their tariffs by Rs 4 per unit for April 2022 under monthly Fuel Charges Adjustment (FCA) mechanism, amid CPPA-G’s acknowledgement that plants are not being operated due to expensive fuel and foreign exchange constrains.

The increase will be recovered in the bills of June 2022 sans lifeline consumers, whose share in total number of consumers is negligible in summer. The consumers will have to bear the brunt of additional burden of Rs 51 billion.

Nepra Authority, comprising Chairman, Tauseeff H Farooqi, Vice Chairman Rafique Ahmad Shaikh and Member KP, Maqsood Anwar Khan officiated the hearing. Officials from CPPA-G, NTDC and NPCC also attended the hearing and responded to queries raised by the Authority.

Nepra’s tariff department stated that 10.78 percent and 7.82 percent less electricity was generated from natural gas and RLNG respectively in April 2022 and this deficit was bridged through consumption of furnace oil.

During the hearing Vice Chairman Nepra remarked that on one hand cheap power plants are not getting fuel and on the other load-shedding is also being done in the country.

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He argued that 33 gas-fired power plants are at the top of the merit list but they were not in operation, adding that when required gas was not available so then why were those plants still at the top ECO. He urged CPPA-G to review its ECO.

CFO CPPA-G Rehan Akhtar acknowledged that gas-fired plants which were at the top of the ECO were not getting gas. He said, in recent days, overseas Pakistanis who used social media also raised objections on “violation” of EMO. CPPA-G gave a clarification to them on this issue and agreed that ECO should be reviewed keeping in view non availability of natural gas to power plants for the last more than three years.

On a question raised by Vice Chairman, Rafique Ahmad Shaikh, “where we are taking things and do we have any plan to deal with this situation” CFO CPPA-G responded “the situation is unclear at the moment as CPPA-G is also facing issue of rupee depreciation.”

It was also noted that prices of furnace oil, imported coal and spot LNG have increased manifold and the government does not have sufficient foreign exchange to procure required quantity of fuel due to financial constraints.

On questions raised by the Authority, the officials of National Power Control Centre (NPCC) stated that the company has yet to resume operation of Engro Power plant after its belt was broken.

It was also revealed during the hearing that financial impact of violation of merit order was Rs2.95 billion whereas additional Rs2.37 billion was due to non-availability of RLNG for the power sector.

Nepra approves Rs2.86 per unit increase in power tariff for March

The issue of transmission line at Jhimpir, coal-fired China Hub and Hubco also came under discussion as constraints are creating problems. Port Qasim which is also an efficient plant is not operating whereas RLNG-fired plant at Bhikki is not operating on full capacity due to shortage of fuel.

CFO CPPA-G said RLNG factor in April was better and in May was much better. He said Port Qasim was shut due to technical fault, adding the electricity of imported coal of that plant was Rs 11 or 12 per unit on the existing inventory but price of new inventory would be Rs42 per unit.

“There are issues of foreign exchange in addition to other issues but consultation at different forums is in progress every single day to deal with existing situation with minimum load shedding, and minimum burden on consumers,” Akhtar maintained.

The Authority observed the most difficult task is to set up plants but no work has been done on power transmission adding that this was not the job of politicians but of technical people.

After detailed discussion, the Authority agreed to allow Discos to increase tariff by Rs3.9923 per unit for April against the request of Rs4.0554 per unit sought by the CPPA-G.

Copyright Business Recorder, 2022

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