Fuel price adjustment formula: Rs 6.39 per unit hike in Discos power tariff approved

National Electric Power Regulatory Authority (Nepra) has approved Rs 6.39 per unit increase in power tariff of the distribution companies for last four months under fuel price adjustment formula.
The regulatory authority has permitted an overall increment of Rs 6.39 per unit in power tariff including Rs 2.22 per unit for October 2011, Rs 1.27 per unit for November 2011, Rs 0.94 per unit for December 2011 and Rs 1.96 per unit for January 2012, applying the monthly fuel price adjustment mechanism.
The authority gave the approval here on Tuesday during the hearing of four applications forwarded by Central Power Purchasing Committee (CPPA). The meeting was presided over by Nepra Vice Chairman Ghiyas Uddin due to the resignation of Nepra Chairman Khalid Saeed.
The CPPA during the hearing argued that in October 2011 a total 7.774 billion units of electricity were sold by the power distribution companies, November 6.849 billion units, December 6.491 billion units and January 2012 these companies sold 6.01 billion units.
The CPPA stated that actual cost of producing electricity per unit in October was Rs 6.95, in November Rs 6.32, in December Rs 7.26 and in January Rs 9.28 per unit. According to the CPPA from October 2011 to December 2011 power production through gas fell due to gas shortage in the country and the government was forced to enhance power production from furnace oil. The meeting was briefed that increase in power tariff is because of increase in furnace oil prices in global market as well as gas shortage in the country.
The current hike in power tariff would not be applicable on Karachi Electric Supply Company (KESC) and power consumers below 50 units would also be exempted. During the hearing Shaukat Ali Kundi, Member Nepra expressed grave concern over the performance of the CPPA, National Transmission and Dispatch Company (NTDC) and National Power Control Centre (NPCC).
Showing grave concern also over the increasing oil theft and inefficiency in public sector power generation companies, Kundi observed that had the authorities controlled such issues the consumers could have been protected from additional burden in the shape of increased power tariff. The authority decided that final notification of increasing power tariff would be issued in the light of Peshawar High Court decision. According to Nepra officials, the authority following a stay order of the Lahore High Court suspended proceedings but now the LHC has allowed it to start public hearings of the CPPA applications.