NEPRA approves tariff hike of Rs0.36 per unit3 min read

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Officials said that it was was against the priority order of use of fuel in power sector. PHOTO:FILE
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ISLAMABAD:  The National Electric Power Regulatory Authority (Nepra) has allowed power distribution companies to increase tariff by Rs0.36 per unit on account of fuel adjustment for July 2018.

The power regulator took the decision during a public hearing held on Wednesday.

The Central Power Purchasing Agency-Guaranteed (CPPA-G) had sought a 63-paisa-per-unit increase in tariffs of distribution companies on account of fuel adjustment for July 2018.

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The CPPA had claimed the previous adjustment of supplemental charges amounting to Rs2.25 billion (Rs0.16 per unit), which was rejected by the power regulator that allowed the increase of Rs0.36 per unit. The CPPA said that reference fuel cost stood at Rs4.9811 against actual cost of Rs5.6072, registering an increase of Rs0.6261 per unit.

Also Read: Nepra saddled by additional Rs112 billion circular debt in FY17

Power consumers would pay Rs4.5 billion to the distribution companies following the hike in tariff on account of fuel adjustment in the electricity bills next month. The increase will not apply on agriculture, lifeline and K-Electric consumers.

In a surprising development, electricity generation on high-speed diesel – the most expensive fuel – started in July, ignoring liquefied natural gas (LNG) – which is a cheaper fuel – to burden the power consumers with billions of rupees, which was also a violation of merit order.

The CPPA purchased 10.74GWh electricity based on high-speed diesel in July at a cost of Rs12.85 per unit. It purchased 1,283.76GWh electricity produced on residual fuel oil, which accounted for 9.34% of the total generation at a cost of Rs13.55 per unit.

The cost of electricity based on LNG stood at Rs9.72 per unit and its share was 24.5% in the total electricity generation. During the month of July, the second LNG terminal operated at half capacity as the power sector preferred to operate on high-speed diesel and furnace oil instead of LNG and did not place firm order for this fuel.

Officials said that it was was against the priority order of use of fuel in power sector.

The total generation from hydel sources was 3,891.5 GWh accounting for just 28.30% of total generation. The cost of electricity generated by using indigenous gas was Rs5.0246 per unit and its total share in electricity generation was 2,045 GWh, accounting for 14.87% of total generation during the month.

The electricity generated from RLNG was 3,370.24GWh making it 24.51% of total generation at a cost of Rs9.7210 per unit. The coal-fired power generation was 1,736.77GWh, 12.63% of total generation at a cost of Rs6.0323 per unit.

Nuclear power plants generated 735.65GWh of electricity at a rate of Rs0.9523 per unit, cheapest amongst all fuels. Electricity imported from Iran was 28.3989GWh at a price of Rs11.57 per unit. The 99.86GWh was generated through bagasse at a cost of Rs6.1832 and 428.92GWh and 61.52GWh was purchased from wind and solar, respectively.

Also Read: NEPRA to begin legal action against K-Electric for outages

According to the petition, total energy generated in July 2018 was 13,750.83GWh amounting to Rs73.09827 billion. The net electricity delivered to power distribution companies was 13,397.17GWh costing Rs75.120 billion. Out of total delivered electricity, distribution losses stood at 2.5% or Rs0.1442 per unit.

(This news/article originally appeared in The Express Tribune on August 30th, 2018)

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