The National Electric Power Regulatory Authority (Nepra) on Wednesday slashed tariff of power distribution companies (discos by Rs 1.08 per unit) and Karachi Electric Supply Company (KESC) by 46 paisa per unit under the monthly fuel price adjustment mechanism. The impact of this reduction in tariff will appear in the bills for December 2010, to be received by consumers in January 2011.
Former Wapda companies had sought about 79 paisa per unit reduction in existing power tariff due to variation in fuel charges on monthly basis. According to the information provided by the Central Power Purchase Agency (CPPA), the actual fuel charges for the discos for November 2010 are as follows: hydel Rs 0.3463 per unit-RFO-Rs 10.39 per unit- gas- Rs 3.5 per unit - nuclear-Rs 1.12 per unit- import Iran-Rs 4.26 per unit-mixed Rs 11.5 per unit.
Discos had sought Rs 0.7883 per unit for November over the reference price fuel charges of Rs 5.0245 per unit. The KESC had sought a reduction of 10.559 paisa per unit in existing tariff but the regulator slashed it by 46 paisa per unit. Meanwhile, the Ministry of Water and Power, which has no role in tariff fixation, has taken the credit for the tariff reductions, announced by the regulator during the last four months on the basis of data provided by the companies.
"The government has taken all possible steps in power tariff reduction and provided maximum relief of Rs 2.09 per unit for the last four months," claimed a spokesman of the Ministry. According to the Ministry, which has failed to finalise power sector reforms as agreed with the international financial institutions, under the monthly fuel price adjustment, 33 paisa per unit tariff was reduced for the month of August, 36 paisa for September, 32 paisa for October and Rs 1.08 for November, 2001.
Total reduction during the last four months is calculated at Rs 2.09 per unit which the spokesman seems to believe is a major reduction. The spokesman, however, did not clarify what role, if any, the Ministry had played in reducing tariffs. The reduction in per unit price during the last three months (August-October) under the monthly adjustment formula has already been passed on to the consumers. The official statement quoted the Minister for Water and Power, Pervez Ashraf, as saying that the government is determined to provide relief to the consumers. The reduction provided under the fuel price adjustment will definitely give relief to the common man. He said that all the resources are being utilised to generate cheaper electricity.
He was quoted as having said that the government had decided to change its present energy mix to enhance hydel, and coal power generation. Cheaper electricity possible when the generation is from hydel, wind and/or coal will consist of 70 percent of total power generation and steps are being taken in this regard, he added.
Currently, energy from these three sources is only 30 percent of total generation. Khan Khawar hydro project of 72 MW has started its test generation. The work on 969 MW Neelam Jhelum Hydropower project, Jinnah hydro project, and Allai Khawar hydro project is in progress on fast track basis. Diamer Basha Dam of 4500 MW and Kohala hydro project of 1100 MW will start soon.
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