ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved positive adjustment of paisa 79 per unit in tariffs of Discos for March 2023 under monthly Fuel Cost Adjustment (FCA) mechanism.
The Authority conducted a public hearing on May 3, 2023 which was attended by the private sector and officials of CPPA-G, NPCC and NTDC. The cumulative financial impact of FCA adjustment has been assessed at Rs6.7 billion.
The Authority has reviewed the information provided by CPPA-G seeking monthly FCA and due diligence is done accordingly.
From perusal of the information so provided by CPPA-G, the actual pool fuel cost for the month of March 2023 is Rs9.8860/kWh (including previous arrears claim of Rs13.385 billion having impact of around Rs1.5824/kWh), against the reference fuel cost component of Rs8.7122/kWh.
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The actual fuel charges, as reported by CPPA-G including arrears, for the month of March 2023 increased by Rs1.1738/kWh as compared to the reference fuel charges.
CPPA-G claimed net positive amount of Rs760 million as previous adjustments in the FCA claim of March 2023. For Previous Adjustment of Rs427 million for Port Qasim, Rs215 million pertaining to January 2023, owing to revision in Fuel Prices and verification of PPA factors, the same being in line with Authority’s approved rates has been included while working out instant monthly FCA.
Regarding remaining amount of Rs211.8 million pertaining to the period from June 2022 to November 2022, Technical and Financial verification of invoices are required.
Till the time the invoices of Port Qasim are verified for the claimed period, and CPPA-G provides complete reconciliation of claimed amount viz-a-viz already allowed in this regard, the same has been provisionally withheld while working out instant monthly FCA.
Similarly, Previous Adjustment of Rs191 million for GENCO-II, ie, Guddu pertains to the period from January 2022 to June 2022, included in the total adjustment, with Technical and Financial verification of invoices required. Till the time the invoices of GENCO-II are verified for the claim period, and CPPA-G provides complete reconciliation of claimed amount viz-a-viz already allowed in this regard, the same has been provisionally withheld while working out instant monthly FCA.
CPPA-G in the instant monthly FCA has also claimed Rs13.38 billion as arrears, which was previously withheld by the Authority in June 2021. Out of total claim of Rs13.38 billion, an amount of Rs8.764 billion has been verified and Rs819 million has been disallowed.
The verified amount of Rs8.746 million has been included while working out the FCA of March 2023. The remaining amount of Rs3.802 billion is under process of verification, and CPPA-G during hearing requested to allow the same on provisional basis, considering the high interest charges on pending amount which is neither in the interest of consumers nor the power sector.
The Authority keeping in view the request of CPPA-G has decided to allow the remaining amount of Rs3.802 billion on provisional basis in the FCA of March 2023, subject to adjustment based on outcome of final verification.
Chairman NEPRA, Tauseef H Farooqi, in his additional note stated that financial impact due to “Underutilization of efficient power plants” and “System Constraints” is being deducted from day one in the monthly FCA determination.
As mentioned in para 21 of the instant decision, an amount of around Rs1.250 billion has been deducted for the month of March 23 and up-till March 2023, a total amount of over Rs32 billion has been withheld under above two heads. The deduction of Rs1.250 billion made during the month of March 23 also includes Rs275 million on account of overloading of Thar-Matiari CCT leading to curtailment of Thar coal based energy projects.
However, impact due to RLNG shortage had not been deducted as procurement and allocation of RLNG is made by Petroleum Division keeping in view its sectoral priorities. NPCC always maintains that they raise their demand for RLNG well within the stipulated time as agreed with Petroleum Division through Power Division.
Since NEPRA is the Regulator of Power Sector bearing no regulatory control over Petroleum Division, it is not within NEPRA’s domain to penalize Petroleum Division for not purchasing RLNG or not allocating the quantities as demanded by NPCC. Moreover, it is not professionally justified to penalize NPCC for not receiving the demanded quantities of RLNG from Petroleum Division.
Therefore, the Authority chose not to penalize NPCC for something which is not a failure on their part. However, the Authority being cognizant of the matter has already issued advisories to the Ministry of Energy, Power Division, to take up the matter with Petroleum Division for allocation of required quantities of RLNG to power sector in an expeditious manner so as to protect the consumers for any differential cost arising due to unavailability of RLNG.
Member Sindh, Rafique Ahmad Shaikh in his additional note maintained that three most efficient RLNG power plants in Pakistan Power Sector are the Quaid-e-Azam Thermal Power Plant (QATPL), two power plants of National Power Parks Management Company Limited at Haveli Bahadur Shah (HBS) and Balloki with efficiency of these power plants above 61%.
The utilization factors of these three most efficient RLNG power plants were: QATPL around (44.52%), HBS around (61.75%) and Balloki around (69.75%) during the month of March, 2023. It is noted that the accumulated claim by these power plants against part load operation during the above month is Rs3.369 billion.
The full utilization of these power plants could minimize the load shedding on one hand while on the other hand it could help avoid part load charges of Rs3.369 billion.
Copyright Business Recorder, 2023
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