National Electric Power Regulatory Authority (Nepra) has rejected K-Electric's request for a 57.66 paisa per unit increase in monthly fuel charges adjustment (FCA) for November last year. The authority in its 7-page judgement - SRO 77 (1)/2016, on February 3 approved 44 paisa raise instead of KE's proposed 57 paisa.
The power utility in its plea submitted before Nepra on December 23, 2015 had claimed to have faced an increase in fuel cost of Rs 700.593 million for electricity generation from external resources. It said that power generated by its own plants had come down by Rs 38.29m in the month under review. However, the power procured from external sources had higher fuel cost of Rs 738.884m, which resulted in an increase of 57.66 paisa per unit. During November, KE supplied 1.215 billion units of electricity to consumers.
In order to consider the proposed adjustment, the authority held a public hearing at Nepra Tower on January 19, wherein it reserved the decision for audit after receiving consumers' objections on the KE's plea.
The authority's detailed judgement said Abu Bakar Usman, director media relations Pasban Pakistan submitted his objections on the KE's plea and said that the price of furnace oil in market for the month of November 2015 is Rs 27,388 per metric ton as per the attached invoice of BYCO whereas K-Electric has used price of Rs 30,281 per metric ton in its FCA request.
The Authority observed that the fuel price used by K-Electric is the moving/weighted average cost of the opening stock as well as the purchases made during the month from BYCO and Pakistan State Oil (PS0). Hence, deriving the rate of furnace oil merely on the basis of invoice from BYCO without taking into account the cost of PSO and the cost of opening stock of furnace oil is not correct.
Usman also submitted that K-Electric, as evident from the instant FCA request, relies more on power purchase and underutilizes its own generation and resultantly subjects its consumers to load-shedding. During the hearing, the Authority also inquired K-Electric that why it is subjecting it consumers to loadshedding when it has reserves for more utilisation on BQPS-I, Korangi Gas and Site Gas power stations. K-Electric responded that around 450 MW was shed in the current month as per the policy adopted by K-Electric according to which load shedding is carried out in areas in proportion to their losses. Regarding the low utilisation factor, K-Electric submitted that the same was due to non-availability and low pressure of gas on those power stations.
The Authority showing dissent on the statement of K-Electric's representative stated that the aforementioned plants could have been operated on alternative fuels and the load shed policy mentioned by K-Electric has not been approved by the Authority. It has also been observed that K-Electric is keeping its own available generation capacity idle relying more on the energy purchased from NTDCL. By doing so, K-Electric is not only necessitating the operations of the most expensive power plants in NTDCL's system but also aggravating the menace of load shedding in its own service territory as well as the whole country.
The Authority also noted that K-Electric has been issued an explanation notice regarding, inter cilia, the underutilization of its own generation capacity; the matter which is currently under proceedings before the Honourable High Court of Sindh and shall be decided in light thereof. Nevertheless, K-Electric is hereby again directed to prudently utilise the available energy of its system to eliminate/reduce the load shedding in its territorial jurisdiction and in the whole country.