Discos’ FCAs for Sept: Nepra approves Rs1.27 per unit negative adjustment

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved negative adjustment of Rs1.27 per unit in Discos FCAs, to refund back Rs15.5 billion against billing for September 2024.

The authority conducted the hearing in the matter on October 30, 2024. The CPPA-G had sought negative adjustment of paisa 71 per unit to refund Rs8.50 billion.

The negative adjustment hall be applicable to all the consumer categories except lifeline consumers, domestic consumers consuming up-to 300 units, Electric Vehicle Charging Stations (EVCS), prepaid electricity consumers of all categories who opted for pre-paid tariff and agriculture consumers of all the Discos.

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Negative adjustment on account of monthly FCA is also applicable to the domestic consumers having Time of Use (ToU) meters irrespective of their consumption level.

It shall be shown separately in the consumers’ bills on the basis of units billed to the consumers in the month of September 2024.

Discos shall reflect the fuel charges adjustment in respect of September 2024 in the billing month of November 2024.

Muhammad Arif, a commentator, submitted that previous adjustments pertaining to bagasse-based power plants of Rs8.2 billion should not be passed onto the consumers and should be reconsidered.

For the sake of gravity the response in para 11 of the Fuel Charges Adjustment decision of XWDISCOs for the month of August 2024 is reiterated.

Amir Sheikh and Muhammad Arif also expressed concerns regarding non-operation of Neelum-Jhelum power plant and cost of around Rs256 billion required to make the plant operational again as per the media reports.

The authority noted that issue of Neelum-Jhelum power plant is being inquired through a high-level committee, constituted by the Federal Government, and the outcome of that inquiry will decide the fate of the plant.

Amir Sheikh also raised concerns regarding high industrial tariffs. CPPA-G responded that the tariff of industrial consumers has decreased from around Rs59/kWh (including taxes) to Rs49/kWh (including taxes) over the last three months.

Member (Technical) Rafique Shaikh, in additional note has stated that inefficiencies in generation and transmission have significant implications for monthly fuel price adjustments.

He has given the following key reasons of inefficiencies in the generation sector that are notably impacting these adjustments and the overall power sector: (i) open cycle operation of the Guddu 747 MW power plant in September 2024 incurred a loss of Rs0.52 billion, as open cycle generation costs 1.5 times more than Combined Cycle mode.

The cumulative loss for FV 2024-25 from this operation is around Rs2.3 billion;(ii) reduced generation at the Guddu 747 MW power plant in September 2024 led to increased reliance on costlier plants, resulting in a loss of about Rs6.4 billion.

The total accumulated loss for FY 2024-25 due to higher-cost generation is more than Rs18 billion;(iii) the absence of generation at the 969 MW Neelum-Jhelum (NJ) power plant in September 2024 resulted in increased reliance on costlier plants, causing a loss of around Rs4.9 billion, based on historical generation and marginal costs.

The total accumulated loss for FY 2024-25 due to higher-cost generation is Rs17.2 billion (approximately);(iv) the non-production of energy from the 747 MW Guddu and 969 MW NJ power plants is also placing a significant foreign exchange burden on the national exchequer; (v) against a dependable capacity of 22,541 MW from thermal “Take or Pay” power plants, the average utilization for September 2024 was only around 40 per cent; (vi) the generation of 12,487 GWh in September 2024, against a dependable capacity of 37,069 MW, reflects an average utilisation factor of 47 per cent of the dependable capacity; (vii) the sale of electricity in September 2024 decreased by 1,372 GWh compared to the reference value.

The total reduction in electricity sales for the first quarter of FY 2024-25, compared to the reference value for the same period, amounted to 5,189 GWh. This decline may lead to an increase in the quarterly adjustment for electricity consumers; (viii) the average utilisation factor of the HVDC during September 2024 was only 46 per cent, while consumers are still paying for a 100 per cent capacity factor and;(ix) the PLAC for September 2024 amounted to Rs3.864 billion. Cumulatively, the PLAC for FY 2024-25 has now reached more than Rs14 billion.

Copyright Business Recorder, 2024