National Electric Power Regulatory Authority (Nepra) on Tuesday approved a refund of Rs 3.24 per unit to the consumers of Distribution Companies (Discos) overcharged in December 2014 in the name of Fuel Price Adjustment (FPA).
The refund of Rs 3.24 per unit will be reflected in the bills of March 2015. Nepra which has already compromised its independence on different occasions, rescheduled public hearing from January 29 to February 17 and wanted to further delay the announcement of determination till February 18, 2015 but due to media pressure, the Authority approved due relief for consumers.
Discos are expected to return Rs 20 billion to the consumers except lifeline consumers that use only 50 units in a month.
During the hearing of a petition filed by the Central Power Purchasing Agency (CPPA) and presided over Chairman Nepra, Brigadier Tariq Saddozai (retired) NTDC conveyed that it has not been able to pay energy price to the newly-established Captive Power Plants (CPPs).
After hearing the arguments of NTDC, Nepra Authority directed the entity to provide all documentation regarding pending payment to new thermal power plants so that these could also be made part of determination, and reserved its judgement till February 19, 2015. However, when electronic media started telecasting tickers against Nepra for not announcing determination, the Authority deliberated again and after a nail-biting discussion, determination was announced.
An official told Business Recorder that the Authority held a meeting after public hearing and reached a consensus that determination should be announced to avert criticism.
"Authority members have divergent views on the announcement of determination but at last they evolved a consensus," the official added.
In reply to a question, the official said that December's determination is already delayed so that Authority decided to include the claims of new IPPs in the tariff petition of January 2015.
According to an official statement, it was observed by the Authority during hearing that the price of the electricity purchased by CPPA from Guddu and Nandipur power plants currently on test running was not being accounted for. CPPA was directed to submit a detailed report with all relevant record on the cost of energy delivered to the consumers during the test period for consideration and appropriate decision and adjustment in the subsequent petition. This would benefit by protecting the consumers from any sudden price hike in the cost of electricity.
CPPA reported to Nepra that 6.57 billion units were sold to the Discos during December 2014. The reference fuel cost component was assessed as Rs 9.5328/kWh whereas the actual fuel cost component was arrived as Rs 6.3241/kWh. Thus reduction of Rs 3.21 was requested by the CPPA with respect to the Nepra reference fuel cost component. The corresponding estimated reference generation mix was assessed as Rs 62,736.95 million whereas actual generation mix arrived was Rs 41,172.56 million which is Rs 21.564 billion less. The difference of Rs 21.0564 billion is attributed to favourable price variance of Rs 16.796 billion and favourable generation mix variance of Rs 4.768 million. After adjustment of the cases of the generation companies pending before High Courts, the corresponding decrease works out as Rs 3.24/kWh. Accordingly, the Authority has decided to pass on the benefit of the Rs 3.24/kWh to the end-consumers.
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