Article Republished By Javier Troconis
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) authorised ex-Wapda distribution companies (XWDISCOs) to collect additional Rs2.868/unit from consumers in their May 2022 energy bills since they paid less than the real cost of power generation in March 2022.
The DISCOs would collect Rs29 billion from electricity users across the country in one month, with the exception of lifeline and K-Electric customers, according to a regulator’s ruling announced on Friday. Because K-Electric is a private firm, its case is handled separately.
It should be recalled that the regulator earlier granted XWDISCOs an extra Rs4.85/unit under the February 2022 fuel charges adjustment (FCA), which is being collected in April 2022 bills. In another decision, the power regulator permitted the K-Electric to recover an additional Rs1.38/unit from its clients in May 2022 for the monthly FCA of February 2022. In just one month, the utility would receive a total of Rs1.58 billion.
On April 27, 2022, the power regulator held a public hearing on a petition filed by the Central Power Purchasing Agency (CPPA) on behalf of XWDISCOs and sought permission to recover FCA of Rs3.1574/unit, having an impact of Rs32 billion.
Nepra Chairman Tauseef H Farooqi chaired the meeting while other members of the Authority also attended the hearing. The Authority observed that energy from costlier RFO-based power plants was generated to over Rs24.913 billion during March 2022. It also asked the CPPA to justify using expensive fuel for power generation.
Interestingly, in his dissenting note, Nepra’s Vice Chairman/Member Rafique Ahmed Shaikh said, “As per the data submitted by NPCC, the average RLNG allocated to power sector during 1 to 10th March 2022 was 331 MMCFD against a demand of 380 MMCFD that resulted in the financial impact of Rs341 million during March 2022. However, it is noted that the demand of 380 MMCFD RLNG as given by system operator for March 2022 was insufficient to optimally operate the RLNG-based power plants.”
Due to less/non-availability of RLNG to various efficient RLNG-based power plants having efficiencies in the range of 51 per cent to above 60 per cent, the utilisation factor of these plants remained very low.
“Due to this factor, the system demand was met by operating less efficient/expensive power plants like KAPCO, HUBCO, etc., on RFO, which adversely affected the fuel cost.” He added, “As the RLNG is an imported fuel, its availability can be ensured through better supply chain management. Accordingly, such mismanagement into the availability of required RLNG can’t be passed on to the consumers.”
On the petition of the K-Electric, Nepra held a hearing on April 4, 2022. The utility sought permission from the regulator to collect Rs3.452/unit. But, after calculating and reviewing the data submitted by the company, Nepra allowed it for an additional collection of Rs1.3863/unit, having an impact of Rs1.586 billion to be recovered in the bills of May 2022 on account of FCA for February 2022. The FCA would apply to all consumer categories except for lifeline consumers.
The Authority, during the hearing, observed that prima facie, certain efficient power plants were not fully utilised, and instead, energy from inefficient sources was generated. The Authority observed that “both KGTPS [Korangi Gas Engine Power Station] and SGTPS [Site Gas Turbine Power Station] was not operated by K-Electric to their full capacities, and also less energy was drawn from NTDC during certain hours, without reducing generation from expensive plants connected to its network. Similarly, KCCPP [Korangi Combined Cycle Power Plant] was also operated on HSD [diesel].”
In the XWDISCO case, the CPPA pleaded that it had charged the consumers a reference tariff of Rs6.2295 per unit in March 2022, while the actual fuel cost was Rs9.3869/unit. Hence it should be allowed to increase the rate by Rs3.1574 per unit.
According to the data provided to Nepra, the most expensive energy generation source, residual fuel oil (RFO), was consumed more than usual in previous months, which also jacked up the total cost of generation. In contrast, the least expensive (renewable) share reduced drastically during the month. Interestingly, the percentage of the RLNG-based power also declined.
According to the petition, the total energy generated in March was 10,418GWh from 8,087 GWh in February. The total cost of generating this electricity was Rs96.03 billion with a per-unit price of Rs9.2178.
The hydel generation share was 16.35 per cent of all energy sources’ generated power pie in March. It contributed 1,703.91GWh of electricity to the national grid. Coal-based power share was 24.83 per cent (2,586.62 GWh) with a per-unit cost of Rs12.4116/unit.
Furnace oil-based power generation more than doubled in March as compared to February. Furnace-power plants generated 10.65pc (or 1106.19 GWh) with Rs21.4564/unit cost. In February 2022, power generation from the furnace was at 526.73 GWh or 6.51pc with Rs22.5214/unit cost. No electricity was generated from High-Speed Diesel (HSD) during February.
RLNG-based power generation stood at 18.87 per cent (or 1965.68 GWh) with a per-unit cost of Rs14.3677, while in the previous month, the imported gas generation share was 15.16 per cent (or 1226.01 GWh), and its per-unit cost was Rs14.3229. The local gas share was 9.53 per cent (992.72GWh). Its generation cost was Rs7.7672/unit.
Interestingly, nuclear energy contributed 15 per cent (or 1,563.66 GWh) at Rs1.0335/unit cost in March. Its contribution was 12.53pc (1013.26 GWh) in the previous month at Rs1.132/unit. Wind power share was 2.57 per cent (269.92 GWh), and bagasse was 1.03 per cent (107 Gwh) at Rs5.982/unit. Electricity imported from Iran was 107 GWh at Rs17.3565/unit. The share of solar power was 68.73 GWh.