Consumers to get 43 paisas/unit cut in electricity bills

The National Electric Power Regulatory Authority (Nepra) has decided a 43 paisas/kWh (unit) cut in electricity bills for April under the fuel adjustment charges, a notification issued by the authority said on Monday.

The announced deduction would be adjusted for consumers in the bills of the subsequent month.

According to the Nepra Act, the authority has to make adjustments in the approved tariff on account of any variations in the fuel charges on a monthly basis.

During April 2021, the National Transmission and Dispatch Company (NTDC) has reported the provisional transmission and theft (T&T) losses of 277.32GWh, i.e., 2.71 per cent based on the energy delivered on its system; however, on verification, the T&T losses were verified as 2.691 per cent; therefore, for working out the fuel adjustment charges of April 2021, NTDC considered the T&T losses of 275.37GWh.

The cut in electricity bills, on approval by the regulator, would not benefit those who are using less than 300 units and agriculture consumers on the premise that they already enjoyed subsidised rates. This would also not be applicable to the K-Electric consumers.

Moreover, Nepra has warned the Central Power Purchasing Agency (CPPA) and NTDC for procuring electricity from inefficient fuel oil-based power plants, while certain efficient power plants were not fully utilised.

In its fuel adjustment charges determination for April 2021, the authority noted that NTDC and CPPA had been repeatedly directed to provide complete justification, in this regard, and submit complete details for deviation from the Economic Merit Order (EMO), showing hourly generation along with the financial impact for deviation from EMO.

“Serious directions of authority to CPPA and NTDC not being implemented since around fourteen [14] months, which tantamount to shying away from discharging the duties, which has great financial implications,” an additional note on the determination read.

“Non-supply of RLNG [regasified liquefied natural gas] is the issue of governance and can be managed through efficient supply chain management.”

According to the authority’s observation, certain efficient power plants were not fully utilised and instead energy from the costlier RFO-based power plants was generated worth over Rs1.77 billion during April 2021.

During the course of the hearing, the National Power Control Center / National Transmission Dispatch Company explained operations of the power plants on RFO (residual fuel oil); however, the authority observed that an in-house analysis had also been carried out, to work out the financial impact due to deviation from EMO based on the information submitted by NPCC.

Nepra has decided to provisionally deduct Rs159.21 million in the immediate fuel adjustment charges until NPCC / NTDC and CPPA-G provide the required details along with complete justification in this regard.

To recall, Nepra in its earlier decisions regarding the fuel adjustment charges for the months of August and October 2020 provisionally deducted Rs6.655 billion and Rs862 million, respectively, on account of deviation from EMO.
However, based on the data submitted by NPCC / NTDC, the authority reworked the aforementioned impact and decided to allow Rs3.951 billion and Rs522 million for the months of August and October 2020, respectively, of the previously withheld amount. The same has been included in the fuel adjustment charges for April 2021.

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