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ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has notified a National Average Uniform increase of Rs 7.0562 per unit in Fuel Charges Adjustment (FCA) for Discos for the month of January 2024.

The decision has been taken by NEPRA in the light of a petition of CPPA-G. NEPRA held a public hearing on February 23, 2024 which was attended by different stakeholders. CPPA-G had sought positive adjustment of Rs 7.62 per unit for January 2024.

The Authority observed that excessive load-shedding was being carried out in various DISCOs ranging from 2 hours to 10 hours, which resulted in reduction in load. Had this load shedding been reduced in South coupled with load management in North, operation of expensive plants in North could have been avoided, resulting in overall reduction in fuel cost. However, all such decisions were required to be taken earlier, in order to minimize impact on the consumers, who are already overburdened with high electricity cost.

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The Authority further noted with concern that approximately over 150,000 connections were pending with DISCOs, which if installed, would have added approximately over 550 MW of demand into the system.

CEO CPPA-G, in response, explained that in North, load management of around 2 to 3 hours was being done, therefore, it was not advisable to carry out any further load management.

CFO CPPA-G while responding to the queries and concerns raised by various commentators, submitted that while setting up of reference values, all factors and input of stakeholders is considered, however, it is not possible to project the same with 100% precision.

Going forward, all entities including CPPA-G and NTDC/NPCC are working cautiously to include all the relevant parameters, while re-basing tariff for the FY 2024-25.

On the point of forced outages, it was submitted that the same cannot be predicted being a forced outage, however, scheduled planned outages are accounted for at the time of making projections. On the issue of increase in marine insurance cost, it was stated that there is no impact on the fuel prices of January 2024, however, it may have an impact on future coal procurement decisions. On the concerns raised by LEPP, CPPA-G mentioned that Power Purchase Agreements (PPAs) include Operating procedures, wherein Operating committees are also defined. LEPP, being a member of the Operating Committee, should raise the concern regarding operation of power plant, before such Committee. On the point of winter package, it was submitted that since cheaper generation sources are in South, therefore, owing to South-North evacuation issue, the marginal cost was becoming very high, which was an impediment in offering winter package.

The Authority has heard the parties and the commentators and perused the record. The primary concern raised by the commentators is the enormous increase in the fuel cost of Rs14.6206/kWh for the month of January 2024. In view thereof, the Authority while taking strict notice of the matter has decided to initiate investigation to ascertain the reasons of such huge fuel cost, claimed by CPPA-G for January 2024, under Section 27-A of the NEPRA Act. To this affect a separate investigation order and notice of appointment of investigation officers in accordance with Section 27 of the NEPRA Act will be issued, subsequently.

The Authority has further decided to evaluate the performance of each DISCO individually after the month of Ramzan, on whether any violation of the Act, Rules, Regulations and license has been committed once the data for nine months of the FY 2023-24 i.e. Jul 2023 to Mar 2024 is available. The performance evaluation shall be carried out if terms of sales, losses, recovery, connections, outages etc., and each DISCO shall be held responsible for deviation from the benchmarks set by the Authority. In due course of time, the Authority would also issue certain directives to each DISCO and NTDC, to be placed before their respective BoDs for approval of a viable and workable plan to improve their performance and ensure compliance with the targets benchmarks set by the Authority.

The Authority also directed the Ministry of Energy (MoE) to submit its Power Purchase Price forecast for the FY 2024-25 and DISCOs to file their Annual Indexation/Adjustment request for FY 2024-25, at the earliest in order to ensure that rebasing of tariff for the FY 2024-25 is done in a timely manner.

The Authority further directed MoE to bring proposal to address the issues of system stability, South-North evacuation, system constraints etc., in consultation with all relevant stakeholders and to increase demand.

After detailed deliberations and evaluation of data, NEPRA has observed that actual National Average, uniform FCA was Rs 14.5456 per unit against reference charges of Rs 7.4895 per unit, hence positive FCA has been calculated at Rs 7.0562 per unit. NEPRA has notified new rate which shall be charged in bills of March 2024.

Copyright Business Recorder, 2024

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