The National Electric Power Regulatory Authority (NEPRA) has increased the power tariff by Rs3.99 per unit on account of fuel cost adjustment (FCA) for the month of April 2022 and issued a notification to this effect.
According to NEPRA notification, this power price hike of Rs3.99 per unit shall be applicable to all the consumer categories except lifeline consumers of all the power distribution companies (DISCOs). The said adjustment shall be shown separately in the consumer’s bills on the basis of units billed to the consumers in the month of April 2022 by the DISCOs. The DISCOs shall reflect the fuel charges adjustment in respect of April 2022 in the billing month of June 2022, said NEPRA notification of power tariff hike on account of FCA for the month of April 2022.
While effecting the Fuel Adjustment Charges, the concerned DISCOs shall keep in view and strictly comply with the orders of the court notwithstanding this order, the NEPRA notification added.
According to sources in power sector, the Rs3.99 per unit increase in power tariff will put a burden of around Rs58.5 billion on consumers, including the General Sales Tax (GST) which is charged at 17%.
Earlier, the Central Power Purchasing Agency (CPPA), on behalf of DISCOs, requested the NEPRA to jack up the power tariff by Rs4.5 per unit as FCA of April 2022 for the consumers of DISCOs. And, the Authority (NEPRA) conducted the hearing in the matter on May 31, 2022 and disagreed with the CPPA demand and approved a hike of Rs3.99 per unit. Actual Fuel Charge Component for April 2022 was recorded at Rs10.6010 per kilowatt hour (kWh) while corresponding reference fuel charge component was already fixed at Rs6.6087 per kWh.
On the date fixed for hearing, representatives from CPPA-G, National Power Control Center (NPCC)/NTDC, Media and General Public were present. However, no representation was made from WAPDA Power Privatization Organization (WPPO), Sui Southern Gas Company Limited (SSGCL), Sui Northern Gas Pipelines Limited (SNGPL) and Ministry of Finance despite serving the hearing notice, said NEPRA decision.
During the hearing, the Authority also observed that energy from costlier RFO based power plants was generated to the tune of over Rs.44,094 million during the month of April 2022. The Authority has been directing NPCC/NTDC & CPPA 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.
As per additional note on decision of the Authority regarding Fuel Charges Adjustment of DlSCOs for the month of April, 2022, the data submitted by NPCC, the average RLNG allocated to power sector during the month of April, 2022 was 552 MMCFD against a demand of 690 MMCFD that resulted in indicative financial impact of Rs2,379 Million during the aforesaid month. During the FCA hearing of DlSCOs for the month of April, 2022, the reason for not utilizing the efficient RLNG power plants appears to be non-availability of RLNG. One reason for shortage of RLNG was lesser demand by NTDC/NPCC i.e. requisition of around 690 mmcfd against the actual demand of around 800 mmcfd (as apprised by the system operator to the Authority) another reason is less supply of RLNG by concerned quarters against the demanded quantity of RLNG. Efforts should have been made to improve the supply chain of RLNG to fully utilize the most efficient RLNG power plants and avoid the part load adjustment charges.
As the RLNG is imported fuel and its availability can be ensured through better supply chain management, accordingly, such mis-management into the availability of required RLNG can’t be passed on to the consumers, said the additional note on decision of the Authority regarding Fuel Charges Adjustment of DlSCOs for the month of April, 2022.
It is pertinent to mention that NEPRA’s decision of hike in power tariff will place an additional burden of billions of rupees on the power consumers while this price hike will not apply to K-electric and lifeline users who use upto 100 units a month and fall under protected category of the power consumers of all 10 DISCOs. However, this hike in power tariff will add additional burden to the already burdened masses/power consumers.
