Staff Report
ISLAMABAD:
National Electric Power Regulatory Authority (NEPRA) has notified Rs 1.95 per unit hike in power price on account of fuel charges adjustment (FCA) for the month of August 2021which in result will add Rs 30 billion additional burden on power consumers.
NEPRA, in a notification issued on 8th October, 2021, said that fuel charges adjustment (FCA) for the month of August, 2021 will be charged in the billing month of October 2021 to all consumer categories of power distribution companies (DISCOs) except life line consumers while this FCA will remain applicable only for one month. Similarly, this FCA is not applicable to K-Electric consumers.
According to sources, following to a decision of Rs 1.95/unit hike in power price, power consumers would bear more than Rs 30 billion worth heavy burden.
Raising serious concerns over NEPRA’s decision of power price hike by Rs 1.95/unit, the Vice Chairman NEPRA, Rafique Ahmed Shaikh, in his note of dissent, said that NPCC (National Power Control Center) has once again failed to comply with the directions of the Authority (NEPRA) to report the dispatch of generation plants and out of merit order on daily basis. He said that consistent failure warrants legal proceedings against NPCC. He said CPPA reported 166 instances of plant/s operation in violation of merit order due to system constraints that resulted in financial impact of Rs 1.872 billion during the month of August 2021. Such constraints in transmission system is failure of relevant entities like NTDC and the financial impact due such constraints cannot be passed on the consumers, said NEPRA vice chairman in his dissent note.
“I have also reservations on purchase of electricity from all those power plants whose PPAs (Power Purchase Agreements) were amended/extended without approval of the Authority,” said Sheikh Rafique Ahmed Vice Chairman NEPRA in his dissent note.
According to the note of dissent of the NEPRA Vice Chairman, CPPA-G against failed to submit the segregation of financial impact into heads like impact on account of fuel shortage, system constraints, under utilization of efficient power plants etc and as such the mismanagement into the availability of required RLNG (Re-gasified Liquefied Natural Gas) cannot be passed on to the consumers. Further, huge amount under the head of “previous Period Adjustment” cannot be passed on to the consumers without detailed audit. Therefore, FCA request of CPPA-G only be presented before Authority after financial and technical audit, said Rafique Ahmed Shaikh, Vice Chairman NEPRA in his dissent note.
Earlier, the Central Power Purchasing Agency (CPPA), on behalf of power distribution companies (DISCOs), on behalf Ex-WAPDA DISCOs, had sought an increase of Rs.2.0719/unit for August 2021 over the reference fuel charges i-e Rs 4.77/unit for the power consumers of DISCOs while this proposed hike was estimated to impact Rs 32.30billion. CPPA also informed the NEPRA that price of power produced with high speed diesel (HSD) was Rs 22.62/unit, coal Rs 9.03/unit, Residual Fuel Oil (RFO) Rs 18.24/unut, gas Rs 8.30/unit, Re-gasified Liquefied Natural Gas (RLNG) Rs 13.44/unit, nuclear Rs 0.99/unit, import Iran Rs 12.35/unit, mixed sources of fuel Rs 4.67/unit, and Rs 5.98/unit with baggasse source of fuel. And, NEPRA had conducted a hearing on the matter on September 30, 2021 and later issued a notification of Rs 1.95/unit hike in power price on 8th October, 2021.
