ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Thursday hinted that it would allow Distribution Companies (Discos) to increase tariffs by Rs 1.27 per unit for September 2020 under monthly Fuel Component Adjustment (FCA) mechanism.
The calculation of Rs 1.27 per unit was presented by Nepra's technical team against a request of Central Power Purchasing Agency- Guaranteed (CPPA-G) for increase of Rs 1.36 per unit to recover Rs 17.4 billion from consumers. However, the financial impact calculated by Nepra's technical team is Rs 16.4 billion, after deducting questionable amount of Rs 1 billion.
The public hearing (without the public) was initially presided over by Vice Chairman, Saif Ullah Chattha but later he was replaced by Chairman, Tauseef H. Farooqi. The Authority decided to announce its decision, after a week’s time, aimed at giving reasonable time to CCPA-G and Nepra's team to reconcile figures presented in the hearing.
The Authority and its technical team also questioned the system constraints and running of expensive power plants in September 2020 due to which extra financial cost of Rs 10 billion was added to the total cost. Nepra argued that consumers could have been provided relief in September if generation was not so expensive.
However, General Manager, NPCC, Muhammad Ayub, justified running the plants on furnace oil and HSD.
According to the data submitted to Nepra, in September 2020, hydel generation recorded 4,872 GWh which constituted 37.18 per cent of total generation of the entire month. Generation from coal-fired power plants was 2,283 GWh (17.42 per cent of total generation) at a rate of 6.0262 per unit, HSD-71.70 GWh at a rate of Rs 18.7347 per unit, RFO-762.42 GWh (5.82 per cent of total generation) at a tariff of Rs 12.4494 per unit.
Electricity generation from gas-based power plants was 1,324.13 GWh (10.10 per cent of total generation) at a cost of Rs 6.7705 per unit, RLNG 2,804.56 GWh (21.40 per cent of total generation) at Rs 6.7874 per unit, nuclear-677.89 GWh at Rs 1.163 per unit and 46.66 GWh electricity imported from Iran at Rs 10.1504 per unit.
General Manager, NPCC noted that in September hydel generation was 10 per cent less than the envisaged production due to less indents of provinces whereas gas-based plants generated 5 per cent electricity due to reduced gas pressure. Gas quota of power plants was also diverted to KE. In addition nuclear power plant of 300 MW was out from the system.
General Manager, NPCC gave a detailed presentation on generation plan and reasons for the reduced generation arguing that load shedding would be imminent if generation on furnace oil and HSD was not allowed in September. He said the shortfall of 841 GWh was compensated by using RFO.
He maintained that December would be more difficult due to less supply of gas to the power sector. In December 2020 and January 2021, electricity generation cost will further increase and furnace will be used for generation and other options available for generation.
Nepra also raised questions on shutting down of efficient 660 MW coal-based power plant in Sahiwal for 26 days. GM, NPCC clarified that Sahiwal coal power plant was on annual scheduled outages at which Chairman Nepra questioned why scheduled outages are planned from November to March.
GM NPCC said that annual maintenance outages of 151 power plants are staggered throughout the year.
Chairman Nepra argued that out of total additional impact of Rs 10 billion only Rs 5 billion cost of generation in September 2020 is justified.
He further stated that the amount of Rs 5 billion is related to constraints, saying this is not the responsibility of NPCC but NTDC’s to remove constraints and questioned why consumers should be made to pay for the constraints that are to be removed by the NTDC.
Nepra's official Mr. Khawar claimed that if 841 GWh of electricity could have been generated from efficient power plants instead of from furnace oil and HSD, an amount of Rs 2.68 billion could be saved as the system achieved peak demand in September.
He further noted that the impact of high system demand, violations of economic merit order and under utilization of efficient power plants was Rs 3 billion.
Replying to a question about KE's exclusivity, Chairman Nepra said that letters have been written to three entities and their response is awaited adding that it would be finalised soon.
Copyright Business Recorder, 2020
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