‘Flawed’ data of Discos, CPPA-G: Nepra fails to determine financial impact of Q1 adjustment

ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Wednesday failed to determine financial impact of quarterly adjustment of first quarter (July-September) of FY 2021-22 due to “flawed” figures presented both by the CPPA-G and Distribution Companies (Discos).

A hearing in this regard was conducted by the Authority comprising Chairman Tauseef H. Farooqi, Member Sindh Rafique Ahmad Shaikh, Member Balochistan Rehmatullah Baloch and Member KP Maqsood Anwar Khan.

The case officer informed the participants that a hearing was held on January 22, 2022 on QTA of first quarter of FY 2021-22 in which Discos had sought a positive adjustment of Rs 17.851 billion but the Authority deferred its decision, after Central Power Purchasing Agency-Guaranteed (CPPA-G) raised doubts on the authenticity of data submitted by the Discos.

Of Rs 17.851 billion, positive adjustment of Rs 5.729 billion was sought on account of Capacity Purchase Price (CPP), a Rs 537 million negative adjustment as variable O&M, Rs. 1.950 billion positive adjustments as Use of System Charges (UoSC), and Rs 10.708 billion for impact of T&D losses on monthly FCA.

However, when the hearing started on Wednesday, Nepra’s Tariff Department team noted that Discos have changed their claims massively and apparently some “confused” adjustment has been sought which will affect different categories of consumers.

It was further noted that Discos have now sought positive adjustment of Rs 28.042 billion, of which Rs7.891 billion have been added to the previous claims as impact of discounted rate on incremental units sold to industry under Industrial Support Package (ISP).

The difference of Rs 7.891 billion confused not only the entire staff of Nepra Authority but also Chief Financial Officer (CFO) CPPA-G, Rehan Akhtar.

Chairman NEPRA pointed out that when the summary of ISP was presented before the Cabinet, CPPA-G/ Power Division had sought a subsidy of Rs 25 billion on incremental consumption which the Cabinet approved.

Member Sindh Rafique Ahmad Shaikh and Member KP Maqsood Anwar Khan quizzed the officials of CPPA-G on claims of Rs 7.891 billion as impact of discounted rate of electricity sold to industry.

The officials of CPPA-G and Discos failed to convince the Authority on the claims. Nepra members expressed their apprehensions that this would also affect other categories of consumers.

However, CFO Lesco complicated the matter more by stating that the power utility has included unadjusted claims of ISP of 2020.

After discussion on the proposed adjustment of Rs 28.042 billion which was Rs 11 billion higher than adjustment proposed in January 2022, Chairman NEPRA directed CPPA-G to convene a meeting of Discos’ representatives and clear the confusion and share the outcome with Nepra’s team. He also suggested that Secretary Power should also be invited to the meeting so that he may bear witness to the discussion.

Wrapping up the proceedings, Chairman NEPRA said that the Authority would issue an official statement in the matter after it receives written replies from CPPA-G and Discos.

Copyright Business Recorder, 2022