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June FCA: Discos allowed Rs9.90/unit tariff hike

  • CPPA-G noted that actual fuel cost for June 2022 was Rs15.8439 per kWh
Published August 13, 2022
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ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has increased distribution companies’ (Discos) tariffs by Rs9.90 per unit for June 2022 under monthly FCA mechanism to be recovered in billings of August 2022. The authority conducted a hearing in the matter on July 28, 2022 attended by the officials of CPPA-G and public representatives.

CPPA-G, in its tariff adjustment request, noted that the actual pool fuel cost for the month of June 2022 was Rs15.8439 per kWh, against the reference fuel cost component of Rs5.9344 per kWh indicating an increase of Rs9.9095 per kWh as compared to the reference fuel charges.

However, Nepra has determined an increase of Rs9.8972 per kWh for the month of June. The raise will not be applicable to lifeline consumers of Discos.

Member Sindh Rafique Ahmad Sheikh, in his additional note, has accused CPPA-G of consistent failure to follow the Authority’s directions in letter and spirit. He directed that the system operator shall report to CPPA-G within 24 hours about dispatch of generation plant(s) out of merit order along with reasons thereof.

The copy of report shall be sent to Nepra simultaneously. CPPA-G shall scrutinize the dispatch report in terms of Scheduling and Dispatching Code (SDC) of Grid Code and prepare a report which shall comprise of:(i) all dispatch deviation from merit order; (ii) plant available but not dispatched; and (iii) dispatch deviation justified or unjustified in term of SDC of Grid Code along with their financial impact.

Member Sindh, who always takes on CPPA-G, NTDC and NPCC, maintained that CPPA-G shall share the report with System Operator and submit it to Nepra at the time of filing of monthly fuel price adjustment request. However, despite clear direction of the Authority to prepare the merit order on actually available fuel(s), the merit order is still being prepared on old consideration, i.e., with indigenous natural (pipeline quality) gas, while this fuel is not available to plants since the last 2-3 years.

May FCA: Nepra allows Discos Rs7.90/unit tariff hike

The current merit order list with non-available fuel is nothing but to mislead or confuse the stakeholders. Therefore, all relevant departments which are responsible to prepare the Merit Order lists shall take immediate action to revise it on the basis of fuel(s) which are available.

The three most efficient RLNG power plants in Pakistan Power Sector are the Quaid-e-Azam Thermal Power Plant (QATPL), and two power plants of National Power Parks Management Company Limited at Haveli Bahadur Shah (HBS) and Baloki; efficiency of these power plants is above 61%. The utilization factors of these three most efficient RLNG power plants were: QATPL around (78%), HBS around (91%) and Baloki around (75%) during the month of June 2022.

It is noted that the accumulated claim by these power plants against part load operation is Rs 3.026 billion. In the wake of high load demand in the system and ongoing electricity shortfall in the country, the full utilization of these power plants could minimize load shedding on one hand while on the other hand it could help avoid part load charges of Rs 3.026 billion.

He further stated that as per the data submitted by NPCC, the average RLNG allocated to power sector during the month of June, 2022 was 800 MMCFD against a demand of 845 MMCFD that resulted in indicative financial impact of Rs. 776.94 million during the month, adding that efforts should have been made to improve the supply chain of RLNG to fully utilize the most efficient RLNG power plants and avoid the part load adjustment charges.

“Due to system constraints, plants were operated in violation of EMO that resulted in financial impact of Rs73.86 million during the month of June 2022. Such constraints in transmission system are failure of the relevant entities in performing their core functions,” Nepra Member continued.

The utilization factor of power plants at Central Power Generation Company Limited (CPGCL), including the newly commissioned Guddu 747 machine, remained very low despite availability of dedicated cheaper gas. Forced outage of unit 14 (373 Mw) of Guddu 747 and Guddu old units (6, 12 & 13) resulted in financial losses due to operation of costlier power plants, he added.

Copyright Business Recorder, 2022

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