ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has approved generation tariff of K-Electric (KE) post June 30, 2023, along with dissenting decision of Member (Finance and Tariff). The tariff control period shall be 7 years or remaining useful life, whichever is lower except for BQPS-III which shall be 11 years.
The determination will not affect electricity rates charged to consumers, which is governed under the uniform tariff policy implemented across Pakistan. KE had filed generation tariff petition in December 22, 2024, which implies decision has been announced after a long period of 22 months.
Nepra has determined total tariff for
(i) BQPS-I, of Rs 38.0847 per unit (energy price Rs 34.4275 per unit);
(ii) BQPS-II, Rs.36.7611 per unit (energy price Rs 313843 per unit);
(iii) KCCPP, Rs 38.0319 per unit (energy price 32.1690 per unit;
(iv) KTGEPS, Rs 39.0264 per unit (energy price Rs 35. 4737 per unit;
(v) SGEPS, Rs 39.6849 per unit (energy purchase price Rs 35.5697 per unit; and
(vi) BQPS-III, Rs 24.3676 per unit (energy purchase price Rs 21.0700 per unit.
Generation tariff: KE requests Nepra to declare pending determination
In its decision, Nepra has allowed K-Electric 14% dollarised Return on Equity (ROE) as opposed to 15% requested by KE in its petition which was in line with the return allowed by Nepra to Independent Power Producers (IPPs).
K-Electric had requested tariff control period for its useful plants for the remaining useful life of its power plants. However, the Authority has allowed tariff control period only up to 07 years or remaining useful life (whichever is lower) except for BQPS-III which is allowed tariff control period for 11 years as opposed to requested 30 years.
The Regulator argued that the tariff beyond the approved control period shall be indicative only and shall require approval of the Authority subject to the approval of extension in the tariff control period.
The dispatch shall be in accordance with the economic merit order as per Grid Code and shall be subject to the mechanism. Capacity payments shall be made in accordance with the hourly availability of the generating units. The responsibility of fuel arrangement shall be on KE.
In case KE is unable to make the plant available for dispatch due to any reason including but not limited to no availability of fuel, capacity payment shall not be allowed.
The reference HHV RLNG price for all plants except BQPS-III is Rs. 3,717/MMBtu and for BQPS-III is Rs. 3,262/MMBtu. The reference gas price is Rs. 857/MMBtu. The reference HSD price is Rs. 232.52/Litre and the reference RFO price is 133,637/ton.
The reference RFC, HHV calorific value of 40,760.748/Kg. shall also be subject to adjustment as per actual on quarterly basis in line with the mechanism provided in case of RFO based IPPs.
O&M components of tariff shall be adjusted on account of local NCPI, US CPI and exchange rate quarterly on 1 July, 1st October, 1st January and 1st April based on the latest available information with respect to CPI notified by the Pakistan Bureau of Statistics (PBS), US CPI (All Urban Consumers) issued by US Bureau of Labour Statistics and revised TT & OD selling rate of US Dollar notified by the National Bank of Pakistan as per the following mechanism.
Indexation applicable to ROE: RoE component of tariff shall be quarterly indexed on account of variation in Rs/$ parity at exchange rate of Rs 287.10/$.
Indexation applicable to debt servicing- local loan: The interest cost of component of local loans shall be subject to quarterly variation in interest rate. The reference KIBOR is 22.91 per cent.
Sinosure Loan (Unhedged): Sinosure Loan (Unhedged) of BQPS-III and its interest shall be adjusted for exchange rate and interest rate variation quarterly on 1st My, 1st October, 1st January and 1st April on account of TT & OD selling rate of US dollar for the quarter immediately preceding the relevant period as notified by the National Bank of Pakistan, wherein the reference TT& OD selling rate is Rs. 287.10/$. The reference SOFR is 5.09%.
Sinosure Loan (Hedged): The hedging cost component of Sinosure Loan (Hedged) shall be subject to variation on the basis of 3 Month KIBOR. The reference KIBOR is 22.91%.
Moreover, Loan Spread amount shall be adjusted for exchange rate variation quarterly on 1st July, 1st October, 1st January and 1st April on account of TT & OD selling rate of US dollar for the quarter immediately preceding the relevant period as notified by the National Bank of Pakistan, wherein the reference TT & OD selling rate is Rs. 287.10/$. Hermes Loan (Hedged): The hedging cost of this loan shall be subject to variation on the basis of three months KIBOR.
Copyright Business Recorder, 2024
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