Reduction Sought in Power Tariff

Govern­ment-run power distribution companies have sought 81 paisa per unit reduction in tariff on account of lower purchase cost of electricity and better energy mix as part of monthly fuel price adjustment. In a tariff petition sent to the National Electric Power Regulatory Authority (Nepra), the Central Power Purchasing Agency (CPPA) reported that its average fuel cost in May had worked out to Rs7.56 per unit against approved reference cost of Rs8.37 per unit for the current fiscal year.

decreasing power tariffs
Reduction sought in power tariff

As a consequence, the CPPA requested, on behalf of the distribution companies, to pass on the impact of lower purchase cost in May to consumers through electricity bills of next month. Nepra has accepted the petition for hearing and is expected to take a decision on it on Tuesday. When approved by Nepra, revised rates would not apply to consumers using less than 50 units per month and those of K-Electric whose tariff is determined separately. Under the fuel price mechanism approved by parliament, Nepra is required to approve a reference fuel price for distribution companies at the start of every financial year and then pass on any changes in average fuel cost, exchange rate variation and energy mix to consumers every month through fuel price adjustment.

The CPPA has reported in its tariff petition that about 34.5 per cent of total electricity generation during the month of May was contributed by hydro power resources while 36.6 per cent supply came from furnace oil-based power plants. Another major contribution, of about 22.45 per cent, was made by gas-based power plants, the CPPA said. It said the generation cost of coal-based power plants stood at Rs4.5 per unit compared to Rs20.6 per unit and Rs14.7 per unit of furnace oil-based plants. The cost of gas-based power plants worked out to Rs4.5 per unit while nuclear power generation cost stood at Rs1.4 per unit.

There is no cost of hydro power generation although its operation and maintenance and other costs are part of fixed charges recovered from consumers. The CPPA said a total of 8,494 gigawatt hours (Gwh) of electricity was generated in May but 160 Gwh of energy was wasted due to transmission losses, or about 1.88 per cent. Therefore, a net electricity of 8,328 Gwh was delivered to distribution companies during the month at a total cost of Rs63 billion. -dawn