NEPRA questions power data as Rs32.7bn recovery sought

The power regulator questioned the reliability of figures submitted by state power entities at a public hearing on a request to recover Rs32.7 billion from electricity consumers through a fuel charges adjustment for September, Business Recorder reported.

The National Electric Power Regulatory Authority is examining the Central Power Purchasing Agency-Guarantee's request for a positive fuel charges adjustment of Rs2.5624 per unit. If approved, it would replace the existing positive adjustment of Rs1.11 per unit, an increase of about Rs1.45 per unit, and the money would be recovered through November bills.

The hearing was presided over by NEPRA Chairman Waseem Mukhtar through an audio link, with Members Amina Ahmed (Tariff and Finance), Maqsood Anwar Khan (Development) and Ghulamullah Shaikh (Law) attending in person. CPPA-G Chief Executive Rihan Akhtar, Power Planning and Monitoring Company Chief Financial Officer Naveed Qaiser and representatives of the Independent System and Market Operator briefed the regulator on generation costs and fuel consumption.

NEPRA's Senior Adviser (Monitoring and Enforcement) questioned the authenticity of data from PPMC and ISMO, observing that the figures given to the regulator differed from those presented at public hearings. Member Amina Ahmed endorsed the concern, saying the Authority was aware of the discrepancies but did not want to turn hearings into a "circus" by taking up every inconsistency.

Industrial representatives asked why expensive fuels made up a large part of September's generation cost. One representative said diesel generation accounted for Rs13.262 billion of a total generation cost of Rs123.618 billion, with diesel about 11 per cent of the value of energy generated, high-speed furnace oil about 9.5 per cent and re-gasified liquefied natural gas about 26 per cent, even though these fuels cost roughly Rs40 to Rs62 per unit.

"This is a huge amount. These fuels cost in the range of Rs40 to Rs62 per unit, yet incremental units are still being sold at Rs23 per unit delivered," an industrialist said, referring to 768 million units sold to some consumers at that delivered price.

The industry also asked why coal plants operated by China Power Hub Generation Company, Port Qasim Electric Power Company, Lucky Electric and Engro Powergen were running below 60 per cent utilisation, and how much of the adjustment was caused by transmission constraints between the northern and southern parts of the country rather than fuel scarcity.

More than Rs16 billion of the Rs32.7 billion falls under a Prior Year Adjustment, which representatives said required reconciliation. They also questioned a proposed quarterly tariff adjustment of about Rs22 billion, or roughly Rs1.30 per unit, warning it would raise winter bills.

PPMC's Naveed Qaiser said circular debt had been cut from Rs2.3 trillion to Rs1.6 trillion and that domestic and industrial tariffs had been reduced by Rs10 and Rs18 per unit respectively. CPPA-G's Rihan Akhtar said earlier industrial tariff cuts had not improved exports, a claim industrial representatives rejected, citing record exports when tariffs were around seven to nine US cents per unit.