NEPRA Grants Permission for Power Tariff Increase
Rise in Power Tariff for Ex-Wapda Discos
The National Electric Power Regulatory Authority (NEPRA) has approved an increase of Rs1.61 per unit in power tariff for the Ex-Wapda Discos (XWDISCOs) due to fuel charges adjustments (FCA) in April.
Adjustment Based on Fuel Charges Variation
NEPRA’s decision entails a rise of Rs1.6075/kWh in the applicable tariff for Ex-WAPDA DISCOs. The adjustment is determined by the fluctuations in fuel charges during April 2023.
Consumers’ Reference Fuel Charges and Total Cost per Unit
The Central Power Purchasing Agency-Guarantee (CPPA-G), representing power distribution companies (XWDISCOs), submitted a petition to NEPRA, citing the consumers’ reference fuel charges for April as Rs8.3875/unit. Accounting for previous adjustments, the total cost per unit amounted to Rs10.3975/unit. The CPPA-G sought permission to pass on the increase of Rs2.0100/unit to the consumers.
NEPRA’s Analysis and Approved Hike
After conducting a public hearing and thoroughly analyzing the data, NEPRA determined that the actual cost of electricity was Rs9.9950/unit, while the reference fuel charges from consumers were Rs8.3875/unit. Consequently, NEPRA approved a hike of Rs1.6075/unit instead of the CPPA-G’s claimed Rs2.010/unit. This decision will result in a burden of over Rs20 billion on power consumers in their June bills.
Fuel Cost Adjustments for Power Plants
Reduction in Claimed Amount
In April 2023, the fuel cost for several power plants, including Foundation Power, Saif Power, Halmore 43, and Thar Coal Block-I, was adjusted downward. As a result, the CPPA’s claim for these power plants reduced by Rs160.2,756 million, as per NEPRA’s decision.
Costly Power Plants in April 2023
During the hearing, NEPRA observed that costly power plants generated energy in April 2023.
Factors Impacting Energy Withdrawal and Financial Consequences
System Operator’s Limitations
In April 2023, the system operator limited the withdrawal of energy from efficient power plants due to various reasons. These reasons, along with their financial impact, included system constraints such as transmission network congestion/overloading amounting to Rs2,079 million, contractual obligations of Rs.306 million, permanent transmission line outage costing Rs757 million, and the financial impact due to underutilization of efficient power plants of Rs584 million.
Provisional Withholding and Justification Requirement
Considering these factors, NEPRA provisionally withheld an amount of Rs3,726 million from the FCA claim for April 2023. The withheld amount will only be released when the National Transmission and Dispatch Company (NTDC) provides complete justification to satisfy the Authority.
Passing on the Impact and Tariff Increase
As the deduction is made due to deviations from the Economic Merit Order (EMO) by the NTDC’s subsidiary, the Authority directed the CPPA-G to pass on the impact of the deduction to NTDC. This tariff increase will apply to all consumer categories except Electric Vehicle Charging Stations (EVCS) and lifeline consumers.