This interesting situation was witnessed at a public hearing on Thursday in the matter of provisional monthly Fuel Charge Adjustment (FCA) in Nepra presided over by Vice Chairman Hamayat Ali Khan.
During the hearing Manager Technical (NTDC) Nisar Akhtar argued that the KE is getting electricity from three sources i.e. own generation, Independent Power Producers (IPPs) and 650 MW from NTDC.
He stated that Power Purchase Agreement (PPA) between the NTDC and KE expired two years ago and has not been reviewed since.
Akhtar requested Nepra to pass an order to suspend 650 MW of electricity to KE until PPA is renewed.
Vice Chairman Nepra, Hamayat Ali Khan, who was presiding over the meeting enquired from Manager Technical whether NTDC has taken the Ministry of Water and Power on board before raising this issue at this forum, to which the response was that NTDC has already written to the Ministry of Water and Power.
The Vice Chairman Nepra further enquired as to why the NTDC does not implement the decision of Council of Common Interests (CCI) with respect to supply of 650MW electricity to KE.
The Manager Technical replied that the CCI had initially allowed supply of 350MW electricity to the KE but later increased it to 650 MW.
He repeated his arguments saying Nepra should issue a directive to terminate the supply of 650 MW electricity to KE. However, the Vice Chairman Nepra did not give any direction on this request.
K Electric had sought increase in power tariff by 40 paisa per unit. The power regulator expressed concerns over increase in power tariff sought by K Electric. The officials of K Electric revealed during the public hearing that they had to operate plants on furnace oil due to unavailability of gas. The power regulator asked why it operated plant on furnace instead of gas to which K Electric officials said that Sui Southern Gas Company Limited (SSGCL) could better respond to the query. The regulator withheld decision on provisional increase of 40 paisa per unit saying that the Authority would take a decision later.
The Vice Chairman also directed Nepras Consultant Ch Masood to probe why KE operated its own plants on furnace oil instead of gas.
The regulator enquired if gas was not provided due to non-payment of dues. If so the KE would be held responsible for producing expensive electricity through furnace oil.
Discos tariff
In another hearing, Nepra approved refund of Rs2.21 per unit to the consumers overcharged by the Discos for December 2016. However, K-Electric and agricultural consumers and those domestic users who consume less than 300 units per month will not be enjoying this relief.
Central Power Purchasing Agency (CPPA) had earlier requested Nepra to reduce tariff by Rs1.85 per unit. During monthly public hearing on the price adjustment mechanism, the regulator decided to refund Rs 2.21 per unit. The CPPA had sought fuel adjustment of Rs 4.5 billion for Guddu power plant. Nepra disagreed with this demand and said that according to its calculation, the fuel adjustment impact was Rs 2.2 billion. Therefore, Nepra disallowed this adjustment which resulted in cut in power tariff by Rs 2.21 per unit.
Vice Chairman Nepra, in his observation stated that the government should rectify faults in Guddu 747 MW power plant otherwise it would prove to be another Nandipur. The power regulator expressed its concerns and observed that it was an efficient power plant but had become a burden. He directed CPPA to take up the matter with the Ministry of Water and Power.
The reduction in actual generation cost was mainly because of dip in global oil prices and better energy mix.
The CPPA said the actual generation cost was lower and hence extra money collected from consumers needs to be refunded through adjustment in the next billing month under automatic fuel pass through mechanism.
According to Nepra, the fuel cost of electricity delivered to Discos was calculated at a total cost of Rs 37 billion at an average cost of Rs6.24 per unit in December against the reference price of Rs 8.104per unit, which suggests that consumers were entitled to reimbursement of Rs1.86 per unit.
The total energy generated in December from all sources stood at 7199,66 GWh at a cost of Rs 37 billion. The CPPA supplied 6982,12 GWh to the Discos at a cost of Rs43.59 billion. The CPPA has faced transmission losses of 212.68 GWh, accounting for 2.95 per cent of total energy supplied.
In December, The CPPA reported that almost 37 per cent power generation was produced through furnace oil based plants at rate of 8.65 per cent which was the highest share in total power generation. The share of power generation through hydel resources dropped to 23 per cent due to less water releases from dams following canal closures in December. The second largest power generation of about 27pc was based on domestic natural gas at the rate of Rs5.3 per unit. As a consequence, these two domestic sources together contributed almost 50pc of energy.
Another cheap source of power generation was nuclear fuel at 60 paisa per unit and its contribution was about 6pc or 441 million units.
Likewise, power production from Re-gasified liquefied natural gas (RLNG) contributed about 4.1pc share or 296m units at an average cost of Rs7.04 per unit. Another saving was on account of about 0.9pc power generation from high speed that cost Rs12.04 per unit.
During the hearing, it was also disclosed that Nandipur power plant had been running on only 2 per cent capacity in December 2016. However, an official of National Power Control Centre revealed that the plant which is running on 436 MW would give 525 MW in May once converted on gas.