NEPRA hikes power tariff by Rs1.80 per unit

NEPRA hikes power tariff by Rs1.80 per unit

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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday continued to express concern over fuel mix management but allowed an increase of Rs1.80 per unit in consumer tariff for ex-Wapda distribution companies (Discos) for a month on account of fuel cost adjustment.

The authority directed power distribution companies to include the tariff hike of Rs1.80 per unit in next month’s electricity bills. The hike would put an additional burden of Rs13.5 billion on electricity consumer.

The decision would generate Rs13.5 billion revenue to the Discos. This is despite the fact that Nepra’s case officers highlighted during a public hearing that prudent utilization of fuel mix would have resulted in “reduction in total fuel cost by around Rs6.7bn i.e. 91 paisa per unit”.

In the month of January, electricity was produced using costly furnace oil, Nepra said, and asked the Central Power Purchasing Agency (CPPA) to come up with an explanation in this regard.

The Nepra team deplored that tariff should not have increased with optimum utilization of cheaper power plants based on LNG instead of running expensive furnace oil based plants.

During a public hearing, the CPPA informed Nepra that liquefied natural gas (LNG) and coal-based power plants were not operational in January, which led to an extra burden on power consumers.

Power generation up slightly

Total energy generation from all sources in January 2018 was recorded at 7,763 GWH against 7,718 Gwh in December. The total cost of energy generated in January amounted to Rs56.73bn, having an average per unit fuel cost of Rs7.31 per unit. About 7,423 Gwh were sold to the Discos for Rs57.13bn with very high transmission losses of 4.27%, significantly higher than maximum permissible limit of 3%. The transmission losses have generally remained lower than 2.7% almost throughout the year so far.

The share of hydel power generation in January was significantly lower at 6.15% compared to 17.3% in December owing to lower water availability when compared to hydropower’s 25% share in October and 34% in September.

Locally produced gas-based electricity production achieved the 22% share – second highest – in total power supply.

The share of coal based generation on the other hand slipped to third position as it contributed about 18.7% in January instead of 20% in December. The share of RLNG-based power generation slightly improved to 14.7% in January from 12.44% in December but still lower than to 22-23% share in recent months.

There was no fuel cost on hydroelectricity while coal-based fuel cost stood at Rs6.80 per unit. HSD based plants generated the most expensive energy at Rs18.5 per unit but its overall contribution to the energy mix was a negligible 0.16%. The furnace oil-based plants generated electricity at a cost of Rs13.92 per unit.

Nuclear energy contributed about 11.66% electricity to the national grid at fuel cost of 95 paisa per unit while power produced by sugar mills accounted for less than 1% share at a fuel cost of Rs6.2 per unit.

The electricity imported from Iran had a cost of Rs11.57 per unit and its total share in generation was 0.45%.

Wind produced 2.01% electricity at zero fuel cost while or 0.56% contribution came from solar energy again at no cost. The higher tariff adjustment will not be charged to lifeline consumers using up to 50 units per month but all other consumer of all categories including industrial sector and agriculture tube wells would have to bear the additional burden. The revised rates would also not apply to K-Electric consumers.

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