ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has increased tariff of power Distribution Companies (Discos) by Rs 3.10 per unit for December 2021, under monthly fuel cost adjustment (FCA) mechanism despite reservations by Member Sindh, Rafique Ahmad Shaikh.

According to a notification, all consumer categories of distribution companies, except for lifeline customers and K-Electric consumers, would pay the 3.1 per unit hike under the FCA in the bills for February 2022. The Rs3.09 increase will put an extra burden of billions of rupees on the inflation-hit consumers. Discos will recover over Rs 26 billion from the consumers as additional cost.

The Authority has reviewed the information provided by CPPA-G seeking monthly fuel cost adjustment (FCA) and due diligence is done accordingly. From perusal of the information so provided by CPPA-G, the actual pool fuel cost for the month of December 2021 was Rs 8.6573/kWh, against the reference fuel cost component of Rs 5.5347/kWh.

The actual fuel charges, as reported by CPPA-G, for the month of December 2021 increased by Rs 3.1226/kWh as compared to the reference fuel charges. The Authority conducted a hearing on February 01, 2022.

According to the regulator, during scrutiny of data submitted by CPPA-G, it was noted that energy reported by CPPA-G from RYK bagasse-based power plant was not as per the joint meter reading report which has been adjusted as 11,719,200 kWh instead of 7,971,900 kWh reported by CPPA-G, along-with its financial impact. This has resulted in increase in fuel cost for December by around Rs 22 million.

CPPA-G also claimed an amount of Rs 2.052 billion on account of previous adjustments in the FCA of December 2021 which has been verified and accordingly has been included in the monthly FCAs of December 2021.

The Authority also observed that, prima facie, certain efficient power plants were not fully utilized and instead energy from costlier RFO/HSD based power plants was generated to the tune of over Rs 11.388 billion in December.

The Authority has been directing NPCC/NTDC and CPPA-G repeatedly to provide complete justification in this regard, to the satisfaction of the Authority and submit complete details for deviation from Economic Merit Order (EMO), showing hourly generation along with the financial impact for deviation from EMO, if any, and the reasons, thereof.

The Authority also observed that an in-house analysis has also been carried out, to work out the financial impact due to deviation from EMO based on the information submitted by NPCC. As per the in-house analysis/workings carried out, it has been noted that around 353.26 GWH were generated from RFO and 250.56 GWh were generated using HSD in December 2021, whereas the capacities of RLNG, coal and gas based efficient power plants were underutilized.

The net amount deductible, on provisional basis, from the overall claim due to deviation from EMO and underutilization of efficient power plants has been worked out as around Rs.4.81 million. The Authority has decided to deduct this amount provisionally in December’s FCA, until NPCC/ NTDC and CPPA-G provide the required details along-with complete justification in this regard to the satisfaction of the Authority.

NTDCL, reported provisional T&T losses of 245.44 GWh based on energy delivered on NTDCL system during December 2021. NTDC in addition also reported T&T losses of 23.215 GWh for PMLTC (HVDC) line.

The Authority, after incorporating adjustments, has reviewed and assessed an increase of Rs.3.0968/kWh in the applicable tariff for Discos as actual FCA for December 2021 was Rs 8.6315/kWh against presumed reference FCA of Rs 5.5347/kWh.

During the hearing, Member Sindh, Rafique Ahmad Shaikh, who raised questions on non-availability of RLNG which was cheaper than furnace oil or HSD, has shown reservation on the determination.

In his dissenting note, he said that as per the data submitted by NPCC, the average RLNG allocated to the power sector was 287 MMCFD against the total demand of 472 MMCFD that resulted in financial impact of Rs 2.069 billion during December 2021.

As RLNG is imported fuel and its availability can be ensured through better supply chain management, accordingly, such mismanagement into the availability of required RLNG cannot be passed on to consumers, he said, adding that actual generation on coal remained 5 per cent less than the reference generation during the month of December 2021. As a result, expensive RFO/ HSD plant were dispatched to meet the system demand.

“I have also reservations on the purchase of electricity from all those IPPs whose PPAs including but not limited to Kapco, AES and Lalpir etc were amended/ extended without approval of the Authority,” he added.