Rs2.97/unit increase in power tarrif

ISLAMABAD: Owing to power generation through expensive sources, the National Electric Power Regulatory Authority (Nepra) on Wednesday refused to pass on Rs2.97 per unit increase to the power consumers on account of monthly fuel adjustment. Nepra held a public hearing on Wednesday to decide Rs2.97 per unit increase in power tariff under the head of monthly fuel price adjustment for the month of September 2019.

But, the power regulator said that in power generation, merit order [power generation from less expensive source first] was not followed that burdened the consumers with Rs7 billion extra.

The regulator did not decide on the Central Power Purchasing Agency (CPPA) that asked the regulator to allow the Discos to charge Rs2.9726/unit extra from the power consumers in their next electricity bills, saying that in September 2019, the cost of electricity was high but it charged the consumer less amount.

While taking strong exception of this violation, the regulator rescheduled public hearing next week [on Tuesday] and sought explanation for violating merit order. Power Regulator suspended hearing till Tuesday next week and announced not to decide the matter of increasing power tariff on account of monthly fuel adjustment unless Central Power Purchasing Agency (CPPA) submits solid reasons for running power plants on expensive fuel.

Nepra chairman asked CPPA authorities to sit with Nepra officials to determine the reasons of violating merit order. Interestingly, CPPA officials claimed that billions of rupees were saved by running power plants on furnace oil which Nepra termed it was violation of merit order as cheaper fuel was not consumed in power plants to save money. They said that furnace oil based power plants helped reduce power loadshedding by one hour.

The CPPA on behalf of the power distributing companies (Discos), had asked Nepra to increase the electricity price by Rs2.97 per unit on account of fuel price adjustment. The reference price was Rs2.84 per unit against actual price of Rs5.8 per unit. The electricity consumers were expected to face an additional Rs25 billion following hike in power tariff to be billed in November.

Around 13.62 billion units of electricity were produced at the cost of Rs70 billion during September. Out of the total power generation, 37.09 percent electricity was generated from hydel sources, 16.39 percent coal, 6 percent residual fuel oil (RFO), 5.50 percent nuclear sources, 1.10 percent wind sources, 0.45 percent solar, 11.85 percent gas and 21.06 percent imported liquefied natural gas (LNG).