Discos’ tariff: Nepra approves Rs1.61 per unit positive adjustment for April

ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has approved positive adjustment of Rs 1.61 per unit for Discos consumers for April 2023 under monthly Fuel Charges Adjustment (FCA) mechanism, total impact of which will be Rs 15.6 billion excluding surcharges and taxes.

The Authority conducted a public hearing on May 31, 2023 attended by representatives from CPPA-G, National Power Control Center (NPCC)/NTDC, media and general public.

Though a number of questions were raised by the Authority with respect to cost of generation, cheap generation and other factors which are responsible for increase in generation cost, Chairman Nepra, Tauseef H Farooqi and Member (Technical) Rafique Ahmad Shaikh expressed their personal views in their additional notes.

Chairman Nepra argued that on the point raised by Member (Technical) regarding lower utilization of efficient RLNG plants of QATPL, HBS and Balloki, the utilization factor has been worked out based on generation for the entire month, assuming 100% utilization of the dependable capacity of each plant for the entire month, adding that he is of the considered view that utilization of each plant needs to be seen on hourly basis, keeping in view the Grid System stability as per the varying demand patterns, scheduled/forced outages of the plants, fuel availability, grid code requirements etc.

According to financial impact due to “underutilization of efficient power plants” and “system constraints” is being deducted from day one in the monthly FCA determination, adding that an amount of around Rs 3,726 million has been deducted for the month of April 2023 and up till April 2023, a total amount of over Rs 35 billion has been withheld under above two heads.

The deduction of Rs 3.726 billion made during the month of April 2023, includes Rs 584 million on account of underutilization of efficient power plants and Rs 2.079 million on account of Transmission network congestion/overloading.

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 sectorial 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 the rights of Nepra 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.

Earlier, Member (Technical) Rafique Ahmad Shaikh, in his additional note, stated that the three most efficient RLNG power plants in Pakistan power sector are the Quaide-Azam Thermal Power Plant (QATPL), two power plants of National Power Parks Management Company Limited at Haveli Bahadur Shah (Has) and Baloki; efficiency of these power plants is above 61%.

The utilization factors of these three most efficient RLNG power plants were: QATPL around (69.41%), HBS around (70.88%) and Baloki around (72.58%) during the month of April, 2023. It is noted that the accumulated claim by these power plants against part load operation during the above month is Rs 3.238 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 Rs 3.238 billion.

He further maintained that the utilization factor of power plants at Central Power Generation Company Limited (CPGCL), including the newly commissioned Guddu 747 machine, remained very low despite availability of dedicated cheaper gas, adding that forced outage of Unit 16 (248MW) of Guddu 747 and Guddu old units i.e. unit 6, 10, 11, 12 & 13 (580 MW) resulted in financial lasses due to operation of costlier power plants.

Member (Technical) argued that NTDC was expected to complete the dedicated transmission line for Shanghai Electric Company Limited — Thar Coal Block-I in July 2022, however, due to various reasons it was unable to complete the line within the specified timelines till April, 2023 and subsequently energy from Thar coal projects is being curtailed.

This curtailment of energy has led to underutilization of the available economical coal generation and that full potential of Thar coal based energy projects cannot be realized unless the transmission system constraints in the Thar region are not resolved.

The inadequate transmission capacity has led to curtailment from the economical energy projects and causing loss of billions of Rupees and this phenomenon will continue unless the transmission line is completed. Such constraints in transmission system is failure of the relevant entities in performing their core functions, he added.

Copyright Business Recorder, 2023