Fuel adjustment: Power tariff up by Rs4.3 per unit for November

Israr Khan
Friday, Jan 14, 2022

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has allowed the power distribution companies (Discos) to collect an additional Rs4.302 per unit from consumers in the January-2022 bills, as in November 2021, they were charged less against actual cost of fuel for power generation.

This huge burden on consumers is being put as the government could not arrange RLNG to run the plants. Owing to low supply of the imported gas, the less efficient plants were operated that generated costly electricity in the month of November 2021. The decision would not be applicable to K-Electric and the lifeline power consumers.

Nepra on Thursday issued the decision pertaining to monthly fuel charges adjustment on account of variations in the fuel charges for November. Engr Maqsood Anwar Khan, Nepra member in his dissenting note on the decision said, “The under-utilisation of the efficient power plants due to the non-availability of RLNG can be avoided if the Ministry of Energy through its Petroleum Division has timely assessed, planned and managed the availability of RLNG. In my opinion, the Ministry of Energy's Petroleum Division (MEPD) is advised to play an active role in ensuring the supply of RLNG being an imported fuel in a timely manner, so that it may not affect the operation of the efficient power plants. Thus, the inefficiencies of the power sector can be mitigated without passing it to the end consumers.”

RLNG being the imported fuel can be managed/ensured through better supply chain management and accordingly impact of such mismanagement in the non-availability of RLNG cannot be passed on to the consumers.

He said that NTDC had conveyed the requirement for RLNG to the federal government in a timely manner. However, if the RLNG could not be made available, it might not be made basis for penalizing the relevant power sector entities regulated by Nepra (particularly when the existing GSAs are based on as and when available basis). The entity responsible for import of RLNG is not regulated by Nepra, and therefore, Nepra cannot take any action against it.

He said, “I disagree with the decision of learned authority members as well as legal adviser opinion on the pretext that one of the primary responsibilities of Nepra is to protect the customers. Since shortage of RLNG is only due to supply chain management and governance issues and is beyond the purview of electricity consumers. Therefore, the burden of mis-governance and inefficiencies cannot be shifted on to the electricity consumers.”

The power regulator held a public hearing on December 29, 2021 on Central Power Purchasing Agency’s (CPPA’s) petition for tariff increase under the monthly fuel charges adjustment (FCA) for the month of November.

In its petition, the CPPA, on behalf of the power distribution companies, said that in November the reference fuel charges from the consumers were Rs3.7381/unit, while the actual fuel cost was Rs8.071/unit; therefore, it should be allowed to pass the increase of Rs4.3329 to the consumers under the FCA for November 2021.

The CPPA also claimed an amount of Rs13.585 billion on account of previous adjustments in the FCA of the month under review. However, the Authority verified the same as Rs13.367 billion, which has been included in the monthly FCAs of November 2021.

Regarding adjustment of Uch-Il, CPPA-G has claimed an amount of Rs6.2137 billion pertaining to the period from November 2013 to December 2019, owing to revision in gas well head prices by OGRA.

Upon directions of the Authority, CPPA-G provided verified invoices for the relevant period, whereby, the amount claimed has been revised as Rs.6.03076 billion.However, as per verification by the Authority regarding energy and PPA factors based on the data provided by CPPA-G, the amount of previous adjustments works out as Rs5.955 billion, which has accordingly been included in the monthly FCA of November 2021.