KE consumers: Rs8.37bn refund approved by Nepra

Karachi Electric

National Electric Power Regulatory Authority (Nepra) on Friday approved refund of Rs 8.37 billion at the rate Rs 4.8862/ kWh to the consumers of K-Electric and an increase of Rs.0.1918/ kWh in tariff of power Distribution Companies for August 2022 under monthly Fuel Charges Adjustment (FCA) mechanism.

The regulator conducted public hearings on the FCA adjustment requests of KE and Discos/ CPPA-G on September 29, 2022, attended by officials of KE, CPPA-G, NTDC, NPCC and consumers’ representatives. KE had sought negative adjustment of Rs 4.211/ kWh to refund Rs7. 217 billion to its consumers, whereas CPPA-G requested positive adjustment of Rs 0.2199/kWh.

KE adjustment shall be applicable to all the consumer categories except its lifeline consumers, domestic consumers consuming up to 300 units, agricultural consumers and Electric Vehicle Charging Station (EVCS) consumers. Negative adjustment on account of monthly FCA is also applicable to the domestic consumers having Time of Use (ToU) meters irrespective of their consumption level. The adjustment shall be shown separately in the consumers’ bills on the basis of units billed to the consumers in the respective month to which the adjustment pertains.

Nepra, in its determination of KE, stated that it noted that the Power Purchase Agreement (PPA) was signed between NTDCL and K-Electric on January 26, 2010 for five years for sale/ purchase of 650-MW at basket rates. Subsequently, a decision was made by the Council of Common Interest (CCI) in its meeting held on November 08, 2012 with respect to the modalities for withdrawal of electric power from NTDCL by the Petitioner, wherein it was decided to reduce the supply of energy by 300MW from NTDCL to K-Electric.

Aug 2022 FCA: KE to refund Rs7.2bn to consumers

However, the aforementioned decision of the CCI has been impugned by way of suits/ petitions by K-Electric in the High Court of Sindh at Karachi. No new agreement has been signed between K-Electric and NTDCL till date and K-Electric is continuing to draw energy from the National Grid, which at present is around 1100 MW.

The Authority, during the hearing, noted that cost of KE’s own generation was around three times higher than the cost of energy it purchases. Upon inquiry by the Authority regarding steps taken by KE to reduce its own cost of generation, KE explained that it has prepared a detailed plan for induction of cheaper energy sources, including renewables.

The Authority had also directed K-Electric to tell the Authority in detail regarding its agreement with PLL for the supply of RLNG for BQPS-III. However, KE has not apprised the Authority in this regard; therefore, it has again been directed to share complete details of KE’s agreement with PLL for supply of RLNG for BQPS-III.

Discos’ approved positive adjustment of Rs 0.1918/kWh with total financial impact of Rs 2.6 billion shall be applicable to all the consumer categories except EVCS and lifeline consumers. The adjustment shall be shown separately in the consumers’ bills on the basis of units billed to the consumers in the month of August 2022. XW-DISCOs shall reflect the fuel charges adjustment in respect of August 2022 in the billing month of October 2022.

Member Sindh, Rafique Ahmad Shaikh, in his dissenting note observed that the three most efficient RLNG power plants are the Quaid-e-Azam Thermal Power Plant (QATPL), two power plants of National Power Parks Management Company Limited (NPPMCL at Haveli Bahadur Shah (HBS) and Baloki whose efficiency is above 61%. The utilization factors of these three most efficient RLNG power plants were QATPL around (41.68%), HBS around (26.01%) and Baloki around (68.53%) during the month of August, 2022.

According to Member Sindh, it is noted that the accumulated claim by these power plants against part load operation is Rs 2.748 billion, adding that in the wake of high load demand in the system and ongoing electricity shortfall in the country, the full utilization of these power plants could minimize the load shedding on one hand while on the other hand it could help avoid part load charges of Rs 2.748 billion.

As per the data submitted by NPCC, the Member noted that the average RLNG allocated to power sector during the month of August 2022 was 400 MMCFD against a demand of 875 MMCFD that resulted in indicative financial impact of Rs. 5.102 billion during the aforesaid month. Efforts should be made to improve the supply chain of RLNG to fully utilize the most efficient RLNG power plants and avoid the part load adjustment charges.

The utilization factor of power plants at Central Power Generation Company Limited (CPGCL), including the newly commissioned Guddu 747 machine, remained very low despite availability of dedicated cheaper gas. Forced outage of unit 16 (249 MW) of Guddu 747 and Guddu old units 6, 10, 11, 12 & 13 (565 MW) resulted in financial losses due to operation of costlier power plants, he added.

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