ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has notified positive adjustment of Rs3.33 per unit in Fuel Charges Adjustment (FCA) of Discos for April 2024 under monthly FCA adjustment formula to recover additional amount of Rs28 billion from consumers.
The Authority conducted the hearing on the matter on May 30, 2024 on a tariff adjustment petition of CPPA-G, in which the former had sought positive adjustment of Rs3.49 per unit.
CEO CPPA-G presented the case before the Authority and submitted that there was lower generation from hydro and local coal as compared to the generation assumed in reference tariff.
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He further submitted that there was not much variation in actual fuel prices vis-a-vis reference values however, certain fuels like RLNG were utilized in higher quantity as compared to the reference values, because of system requirements and contractual obligations.
Upon inquiry from the Authority for operating RLNG plants, CPPA-G submitted that orders for procurement of RLNG was already placed due to the anticipated increase in demand in April, and in case of non-utilization of the ordered quantity, power sector would have to bear the financial burden.
On the issue of low utilization of Thar coal power plants, it was apprised by CPPA-G, that overall utilization of these plants remained around 50% during April 2024, keeping in view the system stability and demand pattern. Regarding curtailment of Thar based plants NTDC responded that due to weather conditions, the demand remained low. The Authority directed NPCC to also include impact of solar generation through distributed generation, as part of its monthly FCA presentation. CFO NTDC also requested the Authority to release the amount of NTDC withheld by the Authority on account of deviation from EMO, as NTDC is facing serious difficulties in managing its operations.
In response to the query raised by Arif Bilwani regarding financial impact of high use of RLNG, CPPA-G apprised that the same is around Rs32 billion. NTDC/ NPCC also apprised that Guddu-747 has a dedicated gas well and not supplied with the pipeline quality gas.
Muhammad Wasim, a commentator, inquired the peak demand and supply in the current month under discussion. NTDC responded that the current peak is 21,600MW.
Thar coal based power plants are operated through dedicated coal mines, having fixed costs, therefore, fuel cost component of these power plants increases, when despatch from these plants is low and vice versa. The Authority directed CPPA-G to present this mechanism in detail in the subsequent FCA hearing.
Qaiser Amir, a representative of Frontier Foundry Steel, submitted that the timelines of NEPRA Act with regards to FCA should be adhered. Faisal Zaffar, a representative of Flying Cement, also submitted that timelines should be adhered to and that only the costs associated with the fuel of power plants should be adjusted in the instant FCA. He also requested certain documents. The Authority instructed him to file a formal application for the relevant documents and follow the proper legal procedure.
According to the determination, the Authority reviewed the request and information provided by CPPA-G seeking a monthly FCA and has conducted due diligence accordingly. Upon reviewing the provided information, the actual pool fuel cost for April 2024, as claimed by CPPA-G, is Rs8.9801/kWh, compared to the reference fuel cost component of Rs5.4918/kWh of the notified consumer-end tariff of Discos for FY 2023-24. The actual fuel charges for April 2024, as claimed by CPPA-G, have increased by Rs3.4883/kwh (Annex-I) compared to the reference fuel charges.
Copyright Business Recorder, 2024
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