CPPA-G criticised for withholding Rs11 billion of consumers

ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Wednesday grilled the Central Power Purchasing Agency- Guaranteed (CPPA-G) for withholding Rs 11 billion of consumers for years.

This was revealed during a public hearing on CPPA-G request for an increase of Paisa 80 per unit in electricity tariffs of Discos for June 2021 under monthly Fuel Component Adjustment (FCA) but Nepra agreed in principle to refund Rs 2.3 billion @ Paisa 16.75 per unit to consumers using over 300 units monthly. However, if an amount of Rs 690.57 million is deducted on account of violation of economic merit order the refund will be Rs 3 billion @ Paisa 21.69 per unit.

Presided over by Chairman, Nepra Tauseef H Farooqi, the Authority expressed its anger at CPPA-G for withholding consumers' amount and sought details of the amount along with reasons for not passing it on to consumers.

CPPA-G, in its FCA request, sought previous adjustments/ supplemental charges of Rs 13.386 billion @ of Paisa 93 per unit, pending for the last three years due to verification of invoices, etc.

During the course of hearing, Chief Financial Officer (CFO) Rehan informed the Authority that since CPPA-G has sought previous adjustments of Rs 13.386 billion, it also has to refund an amount of Rs 11 billion to consumers for "some time". He proposed that with adjustment of Rs 11 billion, the positive impact of increase in tariff will be only a few paisas.

This revelation stunned Chairman Nepra, Tauseef, H. Farooqi and Member Sindh, Rafique Ahmad Shaikh, who is Covid positive and in isolation.

Discos’ consumers: Nepra approves Rs3.3bn refund for May

The Authority took serious note of withholding of an amount of Rs 11 billion of consumers without its consent and mechanism of adjustment proposed by the CFO CPPA-G.

The Authority decided that this issue will be dealt with separately and directed CPPA-G to bring details of withheld amount and previous adjustment along with legal justification as the claims pertain to about three years.

Details of pending Rs 13.386 billion claims of IPPs are as follows: (i) M/s Atlas Power Rs 95 million;(ii) Nishat Power, Rs 261million; (iii) Narowal Energy Limited, Rs 635 million ;(iv) Uch-II, Rs 155.6 million; (v) HSR, Rs 538.5 million; (vi) Engro Thar Rs 4.589 billion; (vii) Port Qasim, Rs 500 million; (viii) Haveli Bahadar Shah, Rs 3.250 billion; (ix) Balloki, Rs 2.178 billion; (x) Reshaman Power, Rs 136.3 million; (xi) Tavanir (Iran), Rs 388.6 million; (xii) Orient Power, Rs 199.5 million; (xiii) Saif, Rs 286.3 million; (xiv) Sapphire, Rs 589.3 million; (xv) Halmore, RS 124.7 million; (xvi) QATPL, - Rs 102 million; (xvii) Foundation Power - Rs 112 million; (xviii) Engro Energy - Rs 191 million; (xiv) Nishat Chunian, Rs 710 million; and (xv) Liberty power Rs 152.573 million.

According to Nepra's team total financial impact deviation from EMO has been calculated at Rs 1.508 billion of which Rs 817.94 billion relates to shortage of RLNG and coal, Rs 165 million due to system constraints, and Rs 525.6 million on account of underutilization of efficient power plants.

A heated debate was also witnessed between CFO, CPPA-G and Member Sindh on reasons for violation of Economic Merit Order (EMO) when the former stated that NTDC is responsible for system constraints not CPPA-G.

When Member Nepra enquired whether CPPA-G has any power supply agreement with NTDC and if there is any penalty clause for not ensuring supply, CFO, CPPA-G replied that it has transmission agreement with NTDC but power supply agreements are between NTDC and Discos.

At this, Member Nepra maintained that whenever such type of clarification is sought, the three stakeholders - CPPA-G, NTDC and Discos - shift responsibility each other. When the situation became quite serious, Chairman Nepra intervened and asked CFO, CPPA-G to come to Nepra offices on Monday to sort out the issue.

Discos tariff: CPPA-G seeks paisa 80/unit increase for June

According to the data submitted to Nepra, in June 2021, hydel generation recorded at 4,222 GWh which constituted 29.40 percent of total generation in the entire month. Power generation from coal-fired power plants was 2,589.79 GWh (18.03 percent of total generation) at a rate of Rs 8.1426 per unit, whereas generation from HSD was recorded at 61.35 GWh (0.43 percent) at Rs 20.2673 per unit. Generation from RFO was 1,174.20 GWh (8.18 percent of total generation) at Rs 14.5285 per unit.

Electricity generation from gas-based power plants was 1,303.84 GWh (9.08 percent) at Rs 8.1697 per unit, RLNG 2,701.34 GWh (18.81 percent of total generation) at Rs 10.5771 per unit, nuclear 1,618 GWh at Rs 1.0001 per unit (11.27 percent of total generation), and electricity imported from Iran was 49.91 GWh at Rs 11.3718 per unit.

Power generation from different sources (mixed) was 10.21 GWh at a price of Rs 4.6442 per unit, generation from baggasse recorded at 56.48 GWh at Rs 5.9822 per unit.

The energy generated from wind was recorded at 510.76 GWh, 3.56 percent of total generation and solar at 63.09 GWh, 0.44 percent of total generation in June 2021.

The total energy generated recorded at 13,361.17 GWh, at a basket price of Rs5.6530 per unit. The total cost of energy was Rs 81.184 billion. CPPA-G also sought previous adjustment/supple-mental charges of Rs 13.386 billion. The sale to IPPs was also reduced by 15.87 GWh, the price of which was Rs 405 million while the recorded reduction in transmission losses was 311.73 GWh.

According to the CCPA-G data, net electricity delivered to Discos in June 2021 was 136971.36 GWh at a rate of Rs 6.7398 per unit, total price of which was Rs 94.165 billion.

CPPA-G in its tariff petition argued that since the reference fuel charges for June 2021 were estimated at Rs 5.9344 per unit whereas the actual fuel charges were Rs 6.7398 per unit, hence an increase of Paisa 80.54 per unit is being sought for June 2021.

Copyright Business Recorder, 2021