Nepra to refund Rs 3.3086 per unit for January

National Electric Power Regulatory Authority (Nepra) has notified refund of Rs 3.3086 per unit for consumers of power Distribution Companies (Discos) for January 2017 under monthly fuel adjustment mechanism instead of Rs 3.23 per unit announced at a public hearing. Nepra has assigned the responsibility of tariff calculations to those "unskilled" technical young officers who are unable to convince participants of public hearings. However, the Authority comprising Chairman and Member sought clarifications on the assumptions of Nepra officials.
On February 28, Chairman Nepra, Brigadier Tariq Saddozai (retd) announced a refund Rs 3.23 per unit after disallowing some adjustments but the notified reduction is Rs 3.3086 per unit. The determination announced by the authority observed that all the relevant points / issues raised by AKLA pertaining to FCA are not only being addressed in the monthly FCA decisions of the Authority but also a detailed reply along with documentary evidence in this regard was sent to AKLA vide Authority's letter dated December 27, 2016; however, AKLA repeated the previously raised issues in the instant email without considering the Authority's response.
According to the determination, on the point of having short notice period, the Authority observed that information from CPPA-G was received on February 24, 2017, however, in order to ensure passing on the benefit of negative FCA to the consumers in March 2017, a longer notice period was avoided. The Authority has gone through the information provided by CPPA-G seeking monthly fuel adjustment and due diligence is done accordingly. From perusal of the information provided by CPPA-G, the actual pool fuel charge for January 2017 was Rs 8.2455/kWh, against the reference fuel cost component of Rs 9.8670/kWh. The actual fuel charges for January 2017 decreased by Rs 1.6215/kWh as compared to the reference fuel charges. The Authority noted that CPPA-G has worked out the fuel cost of Nandipur for January 2017 based on FCC of Rs 8.297/kWh, whereas the Authority's approved FCC in respect of Nandipur from March 31, 2016 was Rs 4.9481/kWh. Accordingly, for the instant FCA adjustment of January 2017, fuel cost of Nandipur of Rs 4.9481/kWh has been used.
As per details provided by CPPA-G, 32.464 GWh were purchased by XWSCOs from small and captive power plants. CPPA-G provided actual details of energy purchased from these plants. The actual fuel cost of this energy was Rs 211.55 million however this works out to be Rs 210.15 million as per Nepra approved rates. Accordingly for adjustment, cost of Rs 210.15 million has been considered on account of fuel cost component of energy purchased from small and captive power plants. CPPA-G reported NTDC transmission losses of 269.01 GWh ie 3.89% during January 2017, which if considered on month to month basis are higher than the Authority's assessed transmission losses of up to 3 percent on annual basis as per its determination of April 23, 2015 for NTDC, notified on July 23, .2015. The Authority observed that NTDC average actual Transmission and Transformation (T&T) loss over the 7 months period from July 2016 till January 2017 works out as 2.46 percent, which is within the Authority's allowed annual limit of 3 percent. Accordingly, for calculation of FCA for January 2017, actual losses of 269.01 GWh ie 3.89 percent have been taken into account for the purpose of working out the FCA.
CPPA-G in its FCA request claimed an amount of Rs 9.7977 billion on account of adjustment for the NPGCL pertaining to the period from FY 2006- 2016. The Authority noted with concern that no details with respect to the nature of the claimed adjustment was provided by CPPA-G. The Authority considered that such claims are not the subject of FCA adjustment and should have been initiated under the relevant rules with proper documentary evidence. In the absence of any verifiable documentary evidence the Authority cannot accept the said claim; accordingly the same is being declined. Consequently the amount of Rs 9.7977 billion has been excluded from the total fuel cost in January.
CPPA-G claimed an amount of Rs 1.090 billion on account of application of part load correction factor for the year 2015-16 for the GENCO-I ie JPCL in the FCA of July 2016. The Authority allowed the amount claimed by CPPA-G, on provisional basis, in the FCA of July 2016, subject to submission of detailed calculations by CPPA-G. CPPA-G afterwards provided the requisite details. The details provided were analyzed by the Authority, whereby an amount to the extent of Rs 284.975 million could be verified against claimed amount of Rs 1.090 billion. In view thereof, the excess amount of Rs 805.714 million was deducted from the total fuel cost while working out the FCA for January 2017. The working in this regard is being shared with CPPA-G and in case of any discrepancy CPPA-G will bring the information for Authority's consideration in the next adjustment. CPPA-G, also, FCA data claimed an amount of Rs 1.816 million on account of partial load adjustment charges for Engro Energy Private Limited. The Authority observed that as per Schedule-1 (6.1)(3) of the its PPA, the impact of heat rate correction factor due to partial loading shall be adjusted while working out the Fuel cost component, considering the cost being legitimate, the said amount has been considered while working out the FCA for Jan, 2017.
The Authority, after incorporating the adjustments, reviewed and assessed a decrease of Rs 3.3086/kWh in the applicable tariff for XWDISCOs on account of variations in the fuel charges for the month of January 2017 instead of Rs 3.23 per unit as was announced in the public hearing. The adjustment is not applicable to those consumers who use up to 300 units monthly.