Nepra allows Rs 1.06 per unit raise in power tariff under fuel price adjustment

Islamabad – The National Electric Power Regulatory Authority (Nepra) has Monday allowed an increase of Rs 1.06 per unit in power tariff under fuel price adjustments for the months of October and November.

The Authority has approved FCA of Rs.0.2925 per unit, having impact of Rs.2.9 billion for the month of October 2020, and FCA Rs.0.7696 per unit, having impact of Rs.5.5 billion for the month of November 2020, said an official notification issued by NEPRA here.  

CPPA-G requested a positive FCA of Rs.0.5713 per unit, having impact of Rs 5.6 billion for the month of October 2020, and positive FCA of Rs.0.9583 per unit, having impact of Rs.6.9 billion for the month of November 2020.  Hearing for both FCAs i.e. October & November 2020, held on December 30, 2020.  

Last month in a public hearing on CPPA’s petition, the regulator came to the conclusion that Rs1.06 per unit increase shall be justified under Fuel Price Adjustments the months of October and November. For October it was concluded to allow an increase of Rs 0.29 per unit while for November it had calculated Rs0.77 per unit. The decision will allow the Discos to collect Rs 8.4 billion from the power consumers.  During hearing NEPRA had expressed serious concern over use of furnace oil in power plants. The Central Power Purchasing Agency (CPPA) informed during the public hearing that it had deducted around Rs15 billion for FO-based power generation. It also suggested that if the government does not want to run the Furnace-based power generators, then it should take them out of the economic merit order and close them once and for all.

The agency pleaded that power distribution companies (Discos) may be allowed to charge Rs 0.5712/unit extra from consumers for the month of October and another Rs0.9582/unit for November in their next electricity bills, arguing that the cost of generation was high, while it sold the electricity at lower price to consumers. They sought two-month combine increase of Rs 1.5294/unit.

The regulator was informed that in October against the demand of 650 mmcfd of gas, 627 mmcfd of gas was supplied to plants. Due to shortage of LNG, plants were been run on furnace oil. National Transmission and Despatch Company (NTDC) official said that the either let running the furnace-based plants or allow power outages in the country. 

To this, vice chairman NEPRA said that they are not in support of load shedding as it affects the domestic, commercial and industrial consumers. For the month of November the CPPA in its petition said, it had charged consumers a reference fuel tariff of Rs 2.4877 per unit in November while the actual fuel cost turned out to be higher. 

Hence, it should be allowed to charge Rs0.95.82 per unit additional cost from consumers.Earlier for the month of October the CPPA in its petition said, it had charged consumers a reference fuel tariff of Rs3.7579 per unit in October while the actual fuel cost turned out to be higher. Hence, it should be allowed to charge Rs0.5712 per unit additional cost from consumers.

The FCA of October & November 2020 shall be charged in the billing month of January 2021 to all consumer categories of XWDISCOs, except life line consumers i.e. having consumption up-to 50 units, and would remain applicable only for one month. This FCA is not applicable to KE consumer