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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra), on Friday, grilled the Power Division and its organisations for their continuous failure to deal with inefficiencies which are overburdening the consumers through unrealistic monthly Fuel Charges Adjustment (FCAs) and shutting down the industry.

This was the crux of a public hearing held on the CPPA-G request to impose FCA of Rs7.13 per unit on the Discos’ consumers for January 2024 to recover an additional Rs56.6 billion.

The authority comprising, Chairman Waseem Mukhtar, Member (Technical) Sindh Rafique Ahmad Shaikh, and Member KPK Maqsood Anwar Khan raised technical issues with the Power Division and organisations including Discos which remained unanswered.

Nepra too concerned about rising tariff?

The authority also directed the Power Division to conduct a formal inquiry and held the responsible accountable for this mess.

According to Member (Technical) Sindh Rafique Ahmad Shaikh, the impact of Rs26.7 billion could have been averted through proper planning by the system operator (NPCC) and the CPPA-G.

“When you (Power Division) will not give us time to go through the facts and figures, then certainly we will take such a decision which will be detrimental for the consumers,” said an annoyed NEPRA chairman.

He said, the chief executive officer (CEO) CPPA-G acknowledged himself that there was no variation in fuel prices and are almost at par with reference then why Rs7.13 per unit adjustment. This was because of the security/ system constraints of the NTDC which had been accounted for in the FCA petition.

“If the real issues would have been accounted for, there should not have been any positive adjustment in FCA,” observed the chairman. The variables of FCA are fuel cost and exchange rate and to some extent electricity demand.

The Nepra chairman directed the CEO CPPA-G to submit the Power Purchase Price (PPP) which should also include all constraints so that the Discos could file their tariff petitions for re-basing for 2024-25.

He was also of the view that the Power Division should have taken the regulator into confidence on the constraints issue. “Why the Power Division did not take the regulator into confidence timely on the constraints issue? Now don’t expect us to become a rubber stamp for you in the future,” he addressed Joint Secretary (Power Finance) Power Division Mehfooz Bhatti.

He also directed the representative of the Power Division to bring a consolidated proposal on system stability and give a safe exit to the regulator as it is also accountable to the people. The Nepra is also launching a consumer complaint application by the end of the current month to resolve complaints online.

“I again voice on behalf of authority that issues be sorted out. We are in a vicious cycle that first raises the price then suppresses the demand and then repeats it.” The Power Division should come up with some intelligent solution to the issues, he said, adding that the Nepra would issue a directive in due course of time for NTDC and Discos which should be presented before the respective Boards for approval of viable/ workable plans before coming to NEPRA in April 2024.

The NTDC/ NPCC was of the view that due to system security constraints expensive plants were operated in the Northern part of the country. They did not agree with the terminology of system constraints in winter months.

Member (Technical) Sindh Rafique Ahmad Shaikh also criticised CPPA-G for seeking a positive FCA of Rs7.13 per unit for January 2024 and termed it “a bomb” that the CPPA-G had exploded. He argued that demand could have been reduced in the North through an increase in load shedding to minimise the impact of FCA.

Shaikh maintained that with a few hours of increase in load shedding in North, the financial impact of FCA could have been brought down by Rs26.7 billion, which implies that per unit of FCA could be nearly a half.

He said the demand in the South could have been increased through cheap generation to minimise the financial impact. He said the industry in the South has shut down.

Member KPK Maqsood Anwar Khan also raised questions on system constraints which have existed for years.

“The country’s industry has shut down due to expensive power. Now domestic consumers are shifting to net metering. If those consumers shifted to net metering, then who will buy electricity from the Discos, he questioned.

The CEOs of Discos, who were specially summoned for the hearing, opted for complete silence on the criticism of regulator. The CEOs have also been conveyed that they should clear pending connections before April 2024 as current connections of over 500-MW demand are pending.

Copyright Business Recorder, 2024

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