NEPRA jacks up power tariff by Rs1.82 per unit

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ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved Rs1.82 per unit increase in power tariff for all the power distribution companies under the head monthly fuel price adjustment (FPA) for the month of September 2019.

However, this power tariff hike will not be applicable on K-Electric, domestic lifeline consumers who use less than 50 units (Kwh) per month, and agricultural consumers.

Earlier, the Central Power Purchasing Agency (CPPA), on behalf of the power distributing companies (DISCOs), had pleaded before NEPRA that variation in the fuel cost for electricity generation should be adjusted. Following the request, the power sector regulator had decided to hold a hearing on October 30. NEPRA, after the hearing on the said matter, postponed the proposed Rs2.97 per unit hike in power tariff till October 5 and had sought an explanation from the CPPA regarding electricity generation through expensive power plants in September 2019.

According to NEPRA sources, the regulatory authority has so far approved Rs1.82 per unit hike on account of September’s fuel price adjustment, but decided not to approve 0.5463 per unit hike in electricity price as some power generation during the said month was done through residual fuel oil (RFO)-based power plants, which is a violation of the merit order.

Due to NEPRA’s refusal to approve 0.5463 per unit hike in electricity price, the requested amount worth approximately Rs7 billion on account of monthly FPA will be treated in future under the head future adjustment, they added.

The approved hike in power tariff would be reflected in monthly power bills of December 2019.

It is pertinent to mention that CPPA, in its application, had earlier informed NEPRA that approximately 13.62 billion units of electricity were produced at the cost of Rs70 billion during September. The CPPA maintained that it had charged consumers a reference tariff of Rs2.8410/kWh against the actual fuel cost of Rs5.8136/kWh. It elaborated that out of the total power generation in the said month, 37.09pc was generated from hydel sources, 16.39pc from coal, 6pc from residual fuel oil (RFO), 5.50pc from nuclear sources, 1.10pc from wind sources, 0.45pc from solar, 11.85pc from gas and 21.06pc from imported liquefied natural gas (LNG).

Similarly, CPPA said that the total energy from all sources remained at 13,621.35 GWH in September and the total cost amounted to Rs70.231 billion with an average per unit fuel cost of Rs5.156 per unit.

The net electricity delivered to DISCOs stood at 13,225 GWh at cost of Rs76.886 billion or 5.8136 per kWh. About 2.91pc losses were reported at the transmission stage.

“Pursuant to Section 31 (7) of the NEPRA Act (XL of 1997) and the mechanism for monthly fuel price adjustment prescribed by the authority in the tariff determination of Ex-WAPDA DISCOs, the authority may on monthly basis make adjustments in the approved tariff on account of any variation in the fuel charges and policy guidelines as the federal government may issue and notify the tariff so adjusted in the official gazette,” an official NEPRA document read.

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