Nepra approves Rs 3.23 per unit refund for January

National Electric Power Regulatory Authority (Nepra) on Tuesday approved refund of Rs 3.23 per unit to consumers of power Distribution Companies for January 2017 under monthly fuel adjustment mechanism against CPPA''s request of Rs 1.62 per unit reduction in tariff. The total financial impact of Rs 3.23 per unit will be over Rs 21 billion. Presided over by Chairman Nepra, Brigadier Tariq Saddozai (retired), the Authority also warned National Transmission and Despatch Company (NTDC) on supplying cheap fuel ie gas to inefficient public sector power plants vis-à-vis private sector efficient power plants.
Hamayat Ali Khan, Vice Chairman Nepra, Major Haroon Rashid (retired), Member Balochistan and Syed Masood-ul-Hasan Naqvi Member Sindh also raised questions on the rationale of gas use in inefficient power plants due to which expensive electricity was supplied to the consumers.
The Authority has also decided to write letters to the Ministries of Petroleum and Water and Power to give gas allocation priority to those power plants which are on top of economic merit order. Central Power Purchasing Agency (CPPA), in its tariff petition informed the Authority that fuel cost of electricity delivered to distribution companies was calculated at a total cost of Rs 54.682 billion at an average cost of Rs 8.2455 per unit in January 2017 against the reference price of Rs 9.8670 per unit, proposing reimbursement of Rs 1.62 per unit for January 2017.
The total energy generated in the country from all sources stood at 6913.6 Gigawatt hours (GWh) in January 2017 at a cost of Rs 44.217 billion. The CPPA supplied 6631.86 GWh to the Discos at a cost of Rs 54.683 billion. The power firms in turn faced a net loss of 269 GWh, accounting for 3.89 percent of total energy supplied. The total cost of lost energy has been calculated at Rs 0.3361 per unit.
In January, CPPA reported that almost 43.4 percent power generation was produced through furnace oil based plants at rate of 8.83 percent which was the highest share in total power generation. The share of power generation through hydel resources dropped to 7.40 percent due to lower water releases from dams following canal closure in January. The second largest power generation of about 30.57 percent was based on domestic natural gas at the rate of Rs 5.17 per unit. As a consequence, these two domestic sources together contributed almost 74 percent of energy.
The per unit cost of coal fired energy was Rs 4.5 per unit, HSD, Rs 13.71 per unit, RFO, Rs 8.83 per unit, RLNG Rs 7.37 per unit, nuclear, Rs 0.81 per unit, import from Iran, 10.63 per unit, mixed Rs 6.51 per unit, baggasse Rs 4.9 per unit. However, when the issue of Rs 10.665 billion adjustments of previous supplemental charges came under consideration, Chairman Nepra enquired from Chief Executive Officer (CEO) Muhammad Rehan as to the basis on which CPPA sought adjustment of Rs 9.6 billion on the differential claims of NPGCL without providing any details.
He enquired whether CEO CPPA has details of 11 years'' old claims or he is just relying on what the Gencos provided. The CEO responded that NPGCL sent claims of Rs 9.6 billion along with notification of 2006, partial loading. CEO CPPA said he had counter checked the claims which were genuine however they had not received any logical reply as to why they submitted their claims 11 years late.
Vice Chairman Nepra enquired whether delay of 11 years in submission of differential claims fall in the category of efficiency or inefficiency; and contended that if it was efficiency then NPGCL should be appreciated and if it was inefficiency, the company should be dealt in accordance with rules.
Chairman Nepra made it clear that the Authority would not allow the differential of Rs 9.6 billion until CPPA certifies the differential claims of NPGCL. One of the officials of Nepra clarified that the company had to file a separate petition with the regulator for the claims and it had also to check whether that amount could be accounted for in monthly fuel price adjustment mechanism.
CPPA had also sought adjustment of Rs 1.090 on account of application part load correction factor for the year 2015-16 for Genco-1 ie JPCL in the FCA of July 2016. The Authority allowed it on provisional basis subject to verification of working of claimed amount. Previously, CPPA had sought this adjustment separately. The case officer informed the Authority that the technical section had verified the claim to the extent of Rs 284.7 million instead of Rs 1.09 billion according to its calculations; the due amount was Rs 285 million, adding the amount of Rs 805.7 million had been adjusted from the total fuel cost of January 2017. He said Rs 805 million could not be passed on to the consumers due to in competency of the CPPA.
However, CEO CPPA contested the Nepra working and requested that it be shared with the CPPA to determine who was at fault and if that was the mistake of CPPA then he said he would bring that claim next month by adjusting it. "We bring claims of billions of rupees and Nepra verifies it. If our working is not accurate then I am ready to send entire data to Nepra for calculation," he added. Chairman Nepra took exception to his remarks and stated that if that responsibility lied with CPPA then the latter should issue the notification from its office instead of coming to Nepra, adding that that implied that Nepra had been assigned some responsibility in counter checking claims and then gave a decision.
When the issue of Nandipur power plant came under discussion, the case officer revealed that CPPA had calculated fuel component cost of Nandipur at Rs 8.297 per unit in January 2017 which was far higher than Rs 4.9481 per unit, provisionally approved by the Authority in March 2016. So the Authority adjusted the amount of Rs 4.9481 per unit in tariff.
Chairman Nepra urged CPPA to notify the tariff of Nandipur, adding if the plant''s tariff was notified then the adjustment would be allowed. He maintained that Rs 300 or Rs 400 million monthly was not allowed to Nandipur since March 2016 which had piled up to Rs 2.5 billion.
"This drama is continuing since March 2016. The difference has reached Rs 2.5 billion which is the right of CPPA but is not being paid due to non notification of tariff. Bring new petition, we will again allow provisional tariff till today but the difference of Rs 2.5 billion will be suddenly passed on to the consumers," he added.
The representative of NTDC informed the Authority in January 2017, hydel generation was negligible and most of the plants operated on gas, furnace oil and HSD. He said NTDC used gas in power plants in accordance with its availability. When the Authority enquired why efficient power plants like Saif, Saphire, Orient and Halmore were not run on gas in January, the representative of NTDC said that gas was allocated by the Ministry of Petroleum. He said NTDC had already written letters to the Ministry of Petroleum and Water and Power along with list of plants efficiency for allocation of gas to the power plants based on economic merit order.
After hearing the viewpoint of NTDC representative, the Authority decided to write letters to both the Ministries, asking them to prioritise gas allocation for those power plants which are efficient. The case officer informed the Authority that actual fuel cost component in January 2017 was Rs 6.4981 per unit against reference price of Rs 9.8670 per unit and proposed refund of Rs 3.3689 per unit. However, the Authority decided to allow 12 paisa per unit transmission losses over and above Rs 3.3 percent transmission loss, and decided to pass on the refund of Rs 3.23 per unit to the consumers.