While approving Rs 3.11 per unit refund for the consumers of Distribution Companies for November 2017 under monthly fuel price adjustment, National Electric Power Regulatory Authority (Nepra) on Thursday grilled Central Power Purchasing Agency (CPPA) for blatantly violating economic merit order. The decision was taken at a public hearing presided over by Chairman Nepra Brigadier Tariq Saddozai (retd) on a petition filed by Central Power Purchasing Agency (CPPA-G) to adjust fuel price variation in accordance with the monthly fuel price adjustment formula. Nepra Members from Punjab and KP, Saif Ullah Chatha and Hamayat Ullah Khan respectively were also present on the occasion.
The CPPA had filed a petition requesting approval of Rs Rs 1.47 per unit on account of fuel adjustment. Discos consumers who use up to 300 units are not eligible for fuel price adjustment. The total impact of Rs 3.11 per unit reduction has been calculated at Rs 25 billion and probably half of the amount would be passed on to the consumers due to faulty FCA mechanism. The CPPA, in the FCA of September 2017, had sought previous Energy Purchase Price (EPP) adjustments of Rs 16.603 billion for NPGCL owing to revision in tariff heat rates in the light of the Authority's determination of January 22, 2016 and subsequent review motion of October 19, 2016 pertaining to FY 2014-15 and FY 2016-17. The said adjustment was disallowed due to non-provision of supporting working/justification by CPPA-G.
The company in its FCA petition of November 2017 has again requested an amount of Rs 16.785 billion in this regard. The Nepra carried out an analysis of the amount claimed by CPPA-G and found that the net claim was Rs 4.535 billion instead of Rs 16.785 billion.
As per the notified determination of July 27, 2017, the NTDC is allowed T&T losses of 2.80 per cent only at 500KV and 220KV network. The energy generated at 132KV level would not be allowed the margin of NTDC losses. The CPPA-G claimed losses of 2.27 per cent for the entire generation including energy generated and delivered at 132KV level directly to Discos.
The NTDC in its letter of December 13, 2017 reported T&T losses of 225.880GWh, ie, 3.63 per cent during November 2017 based on energy of 6,396GWh transmitted through network at 500KV and 220KV level. Accumulative losses of NTDC from August 2017 till November worked out as 2.80 per cent which are higher than the allowed threshold of 2.80 per cent. Accordingly, for working out the FCA for November 2017, losses in excess of allowed limit of 2.80 per cent on accumulative basis have not been accounted for.
In its petition, the CPPA-G reported that it had charged consumers a reference tariff of Rs 7.3040 per unit in November against the actual fuel cost of Rs 5.8313 per unit requesting a reduction of Rs 1.4727 per unit. The reduction in actual generation cost was mainly because of a decline in fuel prices, zero use of high speed diesel (HSD), only 9 per cent use of furnace oil and higher contribution from the cheapest source - hydropower.
During the past, there was more use of high speed diesel in power plants and consumers were burdened with multibillion rupees. However, the major decline in power tariff was due to zero use of high speed diesel in November 2017. According to the CPPA-G, about 7170.43 GWh (gigawatt hours) were generated in November and 6994.47GWh delivered to distribution companies due to about 2.27 per cent transmission and distribution losses.
It said the share of hydropower production in the overall energy mix in November stood at 30.86 per cent compared to 23.96 per cent in October. Wind and solar plants together contributed about 0.99 per cent and 0.59 per cent energy respectively at no fuel cost.
The power generation from furnace oil-based power plants was 9.04 per cent compared to 25.03 per cent in October at a cost of Rs 9.03 per unit. Similarly, the natural gas-based generation was 24.80 per cent in November at a cost of Rs 4.58 per unit. The generation from imported liquefied natural gas (LNG) also contributed 9.34 per cent to the overall power supply at a rate of Rs 7.89 per unit. The overall energy contribution from coal was 13.41 against 6.75 per cent in October and its fuel cost of generation stood at Rs 4.29 per unit.
The share of imported electricity from Iran contributed around 0.57 per cent against 0.41 per cent to the energy pool earlier with a cost of Rs 10.63 per unit. Earlier, Pakistan had been importing 73MW which had increased to 100MW now. The CPPA said total energy was generated at a total cost of Rs 25.24 billion or Rs 3.52 per unit, while 2.27 per cent lesser power was supplied to Discos at a cost of Rs 40.78 billion or Rs 5.8313 per unit.
During the hearing Chairman Nepra grilled CPPA and NPCC representatives for not following economic merit order according to which those power plants are to be run which produce cheaper electricity. The Nepra is raising its voice on this issue in almost every public hearing but the outcome is zero. The chairman Nepra who was furious on consistent violation of economic merit order directed senior advisor to Nepra to seek clarification from CPPA in writing.
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