Nepra questions CPPA’s expensive electricity choice

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday grilled the Central Power Purchasing Agency (CPPA) for prioritising expensive electricity generation over more cost-effective local coal-based generation, leading to increased costs for consumers.

While holding a public hearing on the petition of CCPA, the regulator noted that wrong prioritization had left the consumers with an additional financial burden.

Nepra officials noted that system malfunctions in September resulted in an additional burden of Rs274.26 million, and underutilization of efficient power plants had a financial impact of Rs13.64 million.

It may be noted that CPPA had requested permission to charge an additional Rs0.5471 per kilowatt-hour (kWh) from power consumers on account of monthly fuel charges adjustment (FCA) for September 2023.

The power regulator raised concern during the hearing about the low level of local coal-based electricity generation, prompting questions from Nepra regarding the decision to not utilize cheaper coal for power generation. Nepra also pointed out that expensive fuel-based power plants were favored, while cost-effective options were overlooked. Nepra also noted that power plants running on expensive fuel were preferred whereas the power plants generating cheap electricity were ignored.

According to the CCPA’s application submitted, the total electricity generated with various fuels in the month of September 2023 was recorded at 13,339 GWh, at a price of Rs7.4170 per unit. The total cost of energy was Rs98,938 million.

The power generation with a hydel source was 5,009 GWh (gigawatt per hour) constituting 37.55 percent while power production with coal-fired power plants was 2,123 GWh (local + imported coal: 1,479+ 644GWh) which was 15.91 percent of the total generation at a price of Rs23.4119 per unit and power generation with RFO was 241 GWh, 1.80 percent of total generation calculated at Rs37.0491 per unit.

Similarly, the power generation from gas-based power plants was 1,005 GWh, accounting for 7.54 percent of the total generation, totaling Rs13.5206 per unit and the generation from Re-gasified Liquefied Natural Gas (RLNG) was 2,128 GWh, which was 15.95 percent of the total generation, at Rs24.1876 per unit.

Likewise, power production from bagasse was recorded at 35 GWh, the price of which had been calculated at Rs5.9822 per unit.

The electricity generated from wind was recorded at 410 GWh, 3.08 percent of total generation, and solar at 79 GWh, 0.59 percent of the total generation in September 2023.

Moreover, electricity generation from nuclear sources was 2,286 GWh which came out at Rs1.1975 per unit, 17.14 percent of the total generation, and electricity imported from Iran was 24 GWh amounting to Rs23.7976 per unit, 0.18 percent of the total power generation in the said month.

The CCPA-G informed the Nepra that net electricity delivered to DISCOs in September 2023 was 12,922 GWh (96.88pc) at a rate of Rs7.6182 per unit, the total price of which was Rs98,443 million.

It was also informed that the reference price of electricity stood at Rs7.0711 per unit whereas the actual cost was Rs7.8182 per unit during the month of September 2023. The regulator will issue its final decision in the next few days.