Nepra allows tariff hike of Rs 4.30 per unit

ISLAMABAD: Amid a dissenting note by two of its members and despite 67 per cent electricity coming from cheap domestic resources with stable prices, the National Electric Power Regulatory Authority (NEPRA) on Thursday charged ex-WAPDA distribution companies (discos) its fee. permitted to. Raising additional funds of about Rs.35 billion during the current billing month at a cost of Rs.4.30 per unit of additional fuel cost to consumers.

“The adjustment of increment of Rs 4.3020/kWh will be applicable to all consumer categories except Lifeline customers of all XWDiscos,” the regulator said in a notification issued here. It asked the Discos to show separately the said adjustments in the bills of the consumers based on the units billed by Ex-Wapda Discos (XWDiscos) in November 2021.

The DISCO had sought an increase of around 116 per cent in its fuel price adjustment – Rs 4.33 per unit (kW) – to generate about Rs 36 billion additional money for the electricity sold in November. However, the regulator allowed an increase of Rs 4.30 per unit after minor adjustments here and there.

The regulator also accepted DISCO’s demand to place an additional burden of around Rs 13.367 billion on account of some “previous adjustment” or “supplemental duty” and cost over Rs 21 billion of imported fuel consumed to produce only 33 pcs of power. took.

Two dissenting members say the cost of the government’s failure to import LNG should not be passed on to consumers

Two members, Rafiq Shaikh and Maqsood Anwar Khan, from Sindh and KP respectively, argued that the cost of the government or its entities’ failure to arrange for liquefied natural gas (LNG) imports on demand by power companies should not be passed on to consumers.

It has become increasingly common that government and regulator-approved reference fuel costs become highly unrealistic – a question mark on their economic and financial analytical skills. In recent months, the actual fuel cost has been higher by 44pc to 58pc over the reference rate, but this is the first time the difference has come to around 115pc.

This results in sudden price shocks to consumers on account of monthly fuel adjustments and repeated increases in base power tariffs apparently at the behest of foreign lenders. This comes at a time when the government wants consumers to use more electricity to offset the impact of capacity charges.

On behalf of DISCO, the Central Power Purchasing Agency (CPPA) has claimed that the reference fuel cost of Rs 3.738 per unit was charged from the consumers in November, but the actual cost came to Rs 8.07 per unit, so an additional charge would cost the consumers approx. 4.33 per unit. The regulator calculated the actual fuel cost at Rs 8.04 per unit with additional fuel price adjustment at Rs 4.30 per unit.

Higher electricity rates will be charged from all consumers in the current billing month of January, except those consumers who are using less than 50 units per month.

The data showed that the share of domestic fuel sources in total electricity generation in November was significantly higher than in the previous month (October). The share of hydro power supply in the overall basket registered a healthy growth of 33.2 per cent in November as compared to 23.26 per cent in October. However, hydroelectricity was 36.24 per cent in September, much lower than 35 per cent in August and had no fuel costs.

This was followed by another major part of the 17.5 pc supply coming from nuclear power at only Rs 1.024 per unit fuel cost. The share of nuclear power in the national grid was around 12.33 per cent in October, 9.13 per cent in September and 10 per cent in August. Its fuel cost was also slightly lower than the previous months.

Yet another major contribution of around 13 per cent came from domestic gas at a cost of production of Rs 7.864 per unit. Its share was also 9.67 per cent in October, 8.9 per cent in September and 8.17 per cent in August. The fuel cost of electricity generated from local gas rose slightly from Rs 7.8 per unit in October, but was lower than Rs 8.3 per unit in September.

Three renewable energy sources – wind, bagasse and solar – together contributed to 3.31 pc of electricity supply. There is no fuel cost in wind and solar, while bagasse has been calculated at Rs 5.98 per unit.

Coal-fired power plants, on the other hand, contributed about 16.3 per cent to the national grid in November as against 16.7 per cent in October. Their fuel cost also rose to Rs 13.14 per unit from Rs 11.37 in October.

LNG-based electricity contribution declined to 14.25 per cent in November, from 23.93 per cent in October, 18.9 per cent in September and 18 per cent in August.

Published in Dawn, January 14, 2022