National Electric Power Regulatory Authority (Nepra) on Wednesday reserved determination on a petition of Central Power Purchasing Agency Guaranteed (CPPA-G) with an expected increase in tariff upto Rs 2.50 per unit with revision in base tariff to recover Rs 202 billion from consumers.
This indication came during a public hearing in Nepra Authority comprising Vice Chairman Rehmatullah Baloch, Saif Ullah Chatha and Rafique Ahmed Shaikh on quarterly adjustment of power Distribution Companies (Discos) on account of variation in Power Purchase Price (PPP) for the quarters July to September 2018 and October to December 2018.
As per the notified consumer end tariff methodology guidelines, the Authority in view of any abnormal changes, may review the monthly fuel cost references built in the tariff along with quarterly adjustments. In view thereof, the Authority has decided to deliberate the issue of revision in the fuel cost references built in the currently notified tariff effective from January 01, 2019.
According to the petition, Islamabad Electric Supply Company (Iesco) has sought adjustment of Rs 25.526 billion in two quarters of current fiscal year, Lahore Electric Supply Company (Lesco) Rs 34.04 billion, Gujranwala Electric Power Company (Gepco) Rs 15.866 billion, Faisalabad Electric Supply Company (Fesco) Rs 39.500 billion, Mepco, Rs 35.697 billion, Pesco, Rs 31.068 billion, Hesco, Rs 5.113 billion, Qesco, Rs 8.440 billion, Sepco, Rs 5.113 billion and Tesco, Rs 985 million.
Chief Executive Officer, CPPA-G, Abid Lodhi argued that Nepra should consider issuance of notification of quarterly adjustment on the pattern of monthly Fuel Price Adjustment (FCA) mechanism. He further stated that new references should also be changed through separate hearing for 2019-20 to make it a benchmark. On a question from Saif Ullah Chatha, CEO CPPA-G stated that with the mechanism, regulatory compliance will be accomplished.
"If Nepra is considering its impact on consumers then there is no issue however if it considers it as part of the tariff schedule then it will a counterproductive," Lodhi said, adding with the notification of uniform tariff, complications would arise. He argued that the reference was based on Discos' actual invoice to Nepra. Sajid Akram, the Nepra's case officer stated that the Authority was revising the reference on two issues i.e. an increase in gas price for power plants and rupee depreciation which was the base of the revised base price.
CEO CPPA-G maintained that the Authority had formulated that mechanism to evaluate over and above the actual price. He opposed interlinking of monthly FCA with quarterly mechanism. At this stage, it should be deferred for a quarter. Saif Ullah Chatha stated that a decision on that issue was necessary as the federal government had to earmark resources for the subsidy to be provided to the consumers and there would be no window for this purpose for a long time. Lodhi argued that the process of proceedings of quarterly adjustment must be completed in two months which would be a benchmark for future tariff adding that establishing number of revenue requirements would be finalised in two months.
The Finance Directors of Pesco and Fesco gave justification of their quarterly revenue figures and requested the Authority to allow them the determination. Sajid Akram pointed out that Discos had included it in their quarterly tariff petitions, which were out of quarterly adjustments jurisdiction.
Saif Ullah Chatha asked if any one representing the Ministry of Energy (MoE) would like to share their views; however no one from the Ministry was present in the hearing. Chatha, while addressing the CEO, CPPA-G stated that on Tuesday he discussed the issue with the Ministry of Energy whose viewpoint was entirely different from that of CEO CPPA-G. However, CEO, CPPA-G insisted that he was also representing the Ministry and was ready to answer any query about the Ministry.
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