FCA for Jan 2022: Nepra allows passing additional burden of Rs50bn on to Discos’ consumers

ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) on Monday gave its consent to pass on additional financial burden of Rs 50 billion (approximately at the rate of Rs 5.95/ kWh) to consumers of Discos for January 2022 under monthly Fuel Charges Adjustment (FCA) mechanism.

Out of Rs 50 billion FCA impact, Rs 7.744 billion were on account of non-availability of required RLNG to three RLNG-fired power plants in Punjab. As per the data submitted by the National Power Control Centre (NPCC), the average RLNG allocated to the power sector was 124 MMCFD against a demand of 510 MMCFD.

The Authority comprises of Chairman, Tauseef. H. Farooqi, Member Sindh, Rafique Ahmad Shaikh, Member Balochistan, Rehmatullah Baloch and Member KP, Maqsood Anwar Khan quizzed CPPA-G team, led by CFO, Rehan Akhtar and NTDC senior management.

CPPA-G had sought a raise of Rs 6.10 per unit in electricity rates for January 2022 under FCA mechanism. The key reason of proposed increase in FCA was massive decline in hydel generation and higher cost of imported fuels, i.e., coal, furnace oil, RLNG, and HSD.

During the hearing a threadbare discussion was held on non-availability of RLNG to three power plants. It was termed as incompetence at some level in the Petroleum Division, but the brunt of which has to be borne by the already over-burdened consumers.

It was suggested that there is a need to find out a “hybrid” solution to ensure fuel supply to the power plants so that they can operate in accordance with economic merit order and without fear that they will be penalized for operating on expensive fuels being supplied as per the contract.

On a question raised by Rafique Ahmad Shaikh, it was informed by Nepra’s tariff department team that financial impact of non-availability of RLNG to power plants was Paisa 92 per unit. It is the responsibility of Petroleum Division and its attached organizations to ensure RLNG supply as per the contract.

“When any fuel becomes cheap it disappears but when it becomes expensive it is made available,” Shaikh remarked. He is expected to write a dissenting note on passing of Rs 7.744 billion to consumers on account of non-availability of RLNG which was neither the fault of consumers nor power plants.

Chairman Nepra, Tauseef. H. Farooqi maintained that he would raise this issue at an appropriate level.

NPCC shared the details of plants which were on forced outages due to some technical fault which also include 1100MW K-IV.

The Authority was informed that Pakistan Atomic Energy Commission, (PEAC) which owns nuclear power plants never shared data or the cause of the faults with NPCC due to which the latter is in the dark.

It was informed that electricity demand was 13 per cent higher as compared to reference and cheap HSD-fired power plants were operated in accordance with merit order.

Chairman Nepra remarked that domestic generation sources like water and natural gas are gradually declining.

According to the data submitted to Nepra, in January 2022, hydel generation reduced to 512.94 GWh constituting just 5.83 per cent of total generation from 1,769 Gwh (20.04 per cent of total generation) in December 2021.

Power generation from coal-fired power plants was 2,917.70 GWh in January 2022 against 2,104 GWh in December 2021. The data also shows that coal generation was 33.15 per cent of total generation in January as compared to 23.83 per cent in December 2021. The price of coal generation was Rs 14.1049 per cent in January as compared to Rs 13.3122 per unit in December 2021.

Generation from HSD was recorded at 592.08 GWh in January 2022 (6.73 per cent of total generation) at a price of Rs 25.9801 per unit against 251GWh (2.84 per cent) at Rs 14.0862 per unit in December 2021. Generation from RFO massively increased to 1,238.11 GWh in January 2022 (14.07 per cent of total generation) against 353 GWh (4 cent of total generation) in December 2021 at a cost of Rs 22.2446 per unit.

Electricity generation from gas-based power plants was 1,264.36 GWh in January 2022 (14.37 per cent of total generation) at a cost of Rs 7.7471 per unit against 1,216 GWh (13.77 per cent of total generation) in December 2021 at Rs 7.7489 per unit.

Generation from RLNG was 626.08 GWh (7.12 per cent of total generation) at Rs 16.7034 per unit in January 2022 as compared to 1,192 GWh (13.54 per cent of total generation) at Rs 17.8066 per unit in December, 2021.

Electricity generation from nuclear sources was 1,264.57 GWh (14.37 per cent of total generation) at a cost of Rs 1.0756 per cent in January 2022 as compared to 1,549 GWh at Rs 1.0598 per unit in December 2021. Electricity imported from Iran was 31 GWh at cost of Rs 15.0073 per unit in January 2022 as compared 36 GWh at Rs 13.2683 per unit in December 2021.

Power generation from different sources (mixed) was just 2.30 GWh at a price of Rs 6.2900 per unit whereas generation from baggasse recorded at 107 GWh price which has been calculated at Rs 5.9822 per unit.

The energy generated from wind was recorded at 194.88 GWh, 2.22 per cent of total generation and solar at 46.58 GWh, 0.53 per cent of total generation in January 2022.

The total generation recorded at 8,797 GWh at a basket price of 15.2199 per unit in January 2022 as compared 8,827.05 GWh at a basket price of Rs 8.2430 per unit. The total cost of energy was Rs 107.503 billion.

The sale to IPPs was reduced by 45.79 GWh, the price of which was Rs 1.247 billion (Paisa 27.23 per unit) while the reduction in transmission losses was recorded at 330.85 GWh.

According to the CCPA-G data, net electricity delivered to Discos was 8,420.73 GWh in January 2022 at a price of Rs 12.6184 per unit as compared to 8,530 GWh in December 2021.

CPPA-G in its tariff petition maintained that since the reference fuel charges for January 2022 were estimated at Rs 6.5124 per unit whereas the actual fuel charges were Rs12.6184 per unit; hence, an increase of Rs 6.1060 per unit has been sought for January 2022 under FCA mechanism.

However, after adjustment of Rs 1.279 billion at the rate of Rs 0.152/kWh and Paisa 0.0027 kWh, Nepra has determined an increase of Rs 5.9483 per unit.

Chairman Nepra acknowledged that impact of Rs 58 billion (Rs 50 billion FCA + Rs 8 billion GST) will be passed on to the consumers.

Copyright Business Recorder, 2022