ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Wednesday avoided indulging in government policy matters with respect to expeditious fixing of interconnection points between KE and National Grid (CPPA-G) meant to supply 250-MW cheap electricity from renewable energy plants.
During discussion on KE’s FCA request of negative adjustment of Rs 1.18 per unit (Rs 1.667 billion) for the month of April 2024 as reference interim tariff (difference between actual fuel cost verses reference fuel cost as per the interim tariff), one of the interveners, Arif Bilwani said that KE’s consumers are compelled to purchase expensive electricity from KE instead of cheap electricity from the National Grid. He also asked if Nepra can issue any instruction or write a letter to the Government or Power Division to expedite installation of interconnection to supply cheap electricity to KE consumers.
Bilwani argued that if agreement between CPPA-G and KE had been signed early, consumers would have not been forced to purchase KE’s expensive generation. He also referred to a previous correspondence with the Regulator in which he urged an arrangement of cheap electricity from the national grid for the KE consumers as consumers are already paying capacity payment of idle capacity. He said KE’s RLNG-based electricity is also expensive due to its higher cost, adding that the power sector regulator had done its job in this regard.
Responding to the question, Chairman, Waseem Mukhtar said this is the job of policymakers and Nepra is a Regulator, asking is it suitable for the sector Regulator to intrude in government affairs.
He also queried whether in the absence of an interconnection agreement, should the Regulator shut down existing plants and allow load shedding for Karachiites?
Rescuing the Chairman, Member (Sindh) Rafique Ahmad Shaikh, elaborated that all such things are already a part of Nepra’s annual reports which were also shared with the federal cabinet.
Other consumers shared their personal issues which KE’s team promised to resolve as and when shared with them.
Fuel Charge Adjustment is incurred by utilities due to global variations in fuel prices used to generate electricity and changes in the generation mix. Initially, the utility proposed FCA based on three scenarios and requested approval of any one scenario for the authority’s consideration and guidance in determining the provisional FCA for April 2024 to facilitate timely recovery of costs.
These costs are passed on to customers following Nepra’s scrutiny and approval. The request for FCA is a result of the utilisation of fuel sources based on economic merit order and changes in fuel prices.
KE sought adjustment in FCA under the interim tariff –March 2023 has been calculated at Rs1.18 per unit, the FCA under reference monthly cost Rs 0.44 per unit and FCA reference yearly average cost (Rs0.74) per unit.
Scenario 1, FCA- reference interim (difference between actual fuel cost versus reference fuel).
Scenario II- reference monthly cost (difference between actual cost versus fuel cost as per tariff petition).
Scenario-III, FCA- reference yearly average cost (difference between actual cost versus annual weighted average fuel costs of tariff petitions).
KE’s team’s said that it would respond to queries sent by Nepra’s Monitoring & Enforcement (M&E) Department within two days.
Copyright Business Recorder, 2024
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