ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Wednesday accorded in principle approval of positive adjustment of Rs 1.90 per unit in FCA of Discos and Rs 1.45 per unit for K-Electric (KE) for the month of May 2023 under monthly FCA mechanism, financial impact of which has been calculated at Rs 29.2 billion.
The provisional decisions were taken at a public hearing officiated Chairman NEPRA, Tauseef H Farooqi, Member (Technical), Engr Rafique Ahmad Shaikh, Member (Licensing), Maqsood Anwar Khan, Member (Technical & Finance), Mathar Niaz Rana and Member (Law) Amina Ahmed.
The Authority deferred implementation on its decision regarding charging uniform tariff on procurement of electricity through bilateral contract for one month on request of CEO CPPA-G. Rehan Akhtar.
Discos, KE seek positive adjustment for May
According to Nepra, in light of Power Acquisition Contract of Discos, approved by the Authority and clause 4.5.2 of PPAA of Discos with CPPA-G the energy procured by Discos from such bilateral contracts and net metering of consumers, are made part of Disco individual basket instead of accounting for in the total pool of CPPA-G.
A national average, Fuel Charges Component (FCC) rate, to be charged from consumers on a uniform basis in line with the policy of the Government to maintain uniform tariff, has been worked out. CPPA-G to develop a mechanism for Inter-Disco adjustment of FCAs, similar to the one used for Quarterly Adjustments.
Chairman Nepra made it clear that since the decision has already been taken, it has to be implemented; however, the Authority deferred implementation for one month with the direction that CEO CPPA-G should sit with Nepra’s team to finalize implementation mechanism.
During the hearing, the issue of forced outages of Thar coal-based power plants were also highlighted.
The representative of National Power Control Centre (NPCC), the System Operator (SO) revealed that newly established Shanghai coal power plant was also on forced outage, which raised eyebrows of the Authority.
Chairman Nepra inquired from CEO CPPA-G that if all codal formalities were completed before commissioning of plant, who responded/ clarified that all perquisites were completed. CEO CPPA-G assured the Authority that he would inquire and report back to Nepra.
The Authority also directed its own team to investigate the reasons for forced outage of Shanghai plant. Questions were also raised on charging of LDs instead of actual economic cost due to closure of power plants which are operating under take or pay mechanism.
The Authority Members Maqsood Anwar Khan and Mathar Niaz Rana queried the reasons behind less generation from coal-based power plants and for the high cost of generation from coal.
Some of the participants raised questions about higher rates of electricity which include FCAs, QTAs and proposed substantial adjustment in base tariff from July 1, 2023 apparently under pressure from the International Monetary Fund (IMF).
Chairman Nepra clarified that there is no doubt that cost of electricity is too high, but someone has to bear this cost, adding that the government had provided subsidy of Rs 1 trillion during FY 2022-23.
NTDC team also made hue and cry over deductions of Rs 38 billion under the garb of system constraints during the last four years, which paralyzed the Organization financially as this amount is nearly 40 per cent of its total budget. Member Sindh appeared angry at NTDC officials for accusing Sindhis of stealing materials from transmission towers.
Copyright Business Recorder, 2023