Nepra faces criticism from Karachi power consumers

ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Wednesday faced harsh criticism from electricity consumers of Karachi for allegedly conniving with Karachi Electric (KE) with respect to generation of expensive electricity, forced outages and other ancillary issues.

This criticism came during a public hearing on KE’s request for adjustment of Rs0.97 per unit in FCA for the month of August 2021. The financial impact of proposed will be around Rs1.765 billion.

The Authority comprising Chairman Tauseef.H. Farooqi, Vice Chairman, Rafique Ahmad Shaikh, Member Balochistan, Rehmatullah Baloch and Member KP, Engineer Maqsood Anwar Khan heard the arguments of power utility and consumers for more than an hour.

Karachi Chamber of Commerce and Industry (KCCI) boycotted the hearing against the “attitude” of Chairman Nepra. Arif Bilwani, Aneel Mumtaz, Engineer Hafiz Naeemur-Rehman, Kashir Munir, and Imran Shahid raised different issues facing the Karachiites. Chairman disconnected Imran Shahid for making some unpleasant comments with regard to the weak role of regulator.

KE team comprising, Chief Financial Officer, CFO), Aamir Ghaziani and Director, Regulatory Affairs, Ayaz Jaffer Ahmed briefed the meeting on the basis for seeking an adjustment of Rs 0.98 per unit in FCA for August and other questions raised by the Authority and participants from Karachi.

Nepra allows KE to hike tariff

KE team informed the Authority that reference price of furnace oil has increased by 16 per cent in August 2021 as compared to June 2021, RNLG by 35 per cent, CPPA-G by 16 per cent, coal by 17 per cent while CPPA-G- 150 MW from wind by 16 per cent and Kanuup by 14 per cent per unit.

Nepra’s Monitoring & Enforcement (M&E) informed that it has calculated financial impact of Rs9343.37 million occurred due to violations of Economic Merit Order (EMO) in August 2021. Of this Rs618 million has been estimated on account of lower gas pressure than threshold.

According to Nepra, the KE has claimed that due to low pressure, KGTPS and SGTPS power plants could not generate energy as per their available capacities. Subsequently, the energy had to be generated through expensive/ inefficient plants which caused an indicative financial impact of Rs 618 million.

Nepra has also assumed financial impact of Rs 325.37 million on account of underutilization of efficient energy sources. Nepra team said it noted lesser drawl from NTDC network for continuous hours during low demand periods, i.e., on gazetted holidays/ Sundays. The regulator’s team said it has observed that lower energy is drawn from NTDC, whereas, BQPS-1 is minimum load which needs to be clarified by the KE.

CFO KE clarified the position of utility on this account, maintaining that the power utility has to keep a balance in supply at peak hours on holidays/ Sundays due to which its own plant is kept on operational mode.

During the hearing, it was also noted that an amount of Rs 184 million was previously held on account of non-submission of data by KE. However, later, KE submitted data for temperature variation curves of BQPS-II; therefore, Rs 158 million are cleared from the withheld amount for June 2021. The remaining Rs 26 million is on account of lesser drawl from NTDC network/ minimum loading of BQPS-1 which is under discussion with KE. ME Section proposed that until the deliberation on this amount is finalised, the amount may not be allowed to KE.

The Authority including Chairman and Vice Chairman urged the KE to finalise Gas Sale Purchase Agreement (GSPA) with SSGCL so that the issue of pressure is resolved. In this regard, Nepra wrote a letter to KE on September 15, 2021 and give one-month time to power utility to sort out the issue of gas.

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Chairman Nepra warned the power utility that it would start deduction against violation of EMO if the KE did not finalise agreement with SSGCL. He also suggested that the KE should convene a meeting in this regard and also invite Nepra so that it could play a role of facilitator. Aamir Ghaziani agreed to the proposal of Chairman Nepra, saying the power utility would be happy if the regulator plays any role in this regard.

Ghaziani further stated that the KE is preparing a ten-year generation plan, which will be shared with the regulator soon. Chairman Nepra asked CFO KE to finalize the plan as early as possible, as the regulator has already approved Indicative Generation Capacity Expansion Plan 2021-30.

Chairman Nepra observed that KE generates expensive electricity from its own resources whereas electricity from NTDC is cheaper. During question answer session, Aamir Ghaziani stated that NTDC does not supply more than 1100 MW electricity from the national grid.

The representatives of consumers raised the issues of expensive generation, disconnections of defaulters in one month rather than two months as per Nepra’s rules, and forced load shedding in different areas due to non-payment of bills. Jamaat e Islami (JI) Karachi amir Hafiz Naeemur-Rehman raised the issue of outages in Lyari due to which the residents also staged a protest under the leadership of Jamaat- e-Islami Member Provincial Assembly.

Aamir Zia, who is head of KE’s consumer affairs revealed that some development work including replacement of cables with aerial bundle cable is under progress in some areas of Lyari due to which electricity is disconnected. He maintained that there was no load shed in the area. His claim, however, was rejected by Hafiz Naeemur-Rehman.

Consumers representatives were of the view that Chairman Nepra visits Karachi and inaugurates “Roshni Baji” of KE but he is not holding public hearing in Karachi Arif’Bilwani, who was electronically disconnected in the previous hearing after he argued with Chairman Nepra, proposed that obsolete power plant should be decommissioned as NEECA has already recommended to the government, adding that natural resources (gas) is being wasted by burning it in inefficient plants.

Copyright Business Recorder, 2021