Nepra Allows 29 Paisa Per Unit Cut in Tariff

The National Electric Power Regulatory Authority (Nepra) allowed on Wednesday 29 paisa per unit reduction in tariff for all distribution companies except K-Electric for a month.

It also reserved judgment on an unprecedented demand for up to Rs41 per unit tariff for the under-construction Nandipur power project.

Electricity tariff
Nepra allows 29 paisa per unit cut in tariff

The regulator held a hearing to discuss reduction in consumer tariff under monthly fuel adjustment and another one to deliberate on reference tariff for the Nandipur project. Nepra’s acting chairman Habibullah Khilji presided over the hearings.  The Central Power Purchase Agency (CPPA) told one of the meetings that Nepra had set a fuel-based reference tariff at Rs7.07 per unit for August but the actual fuel cost had worked out to Rs6.78 per unit, requiring a reduction in the tariff in the upcoming billing month of October. The regulator approved the reduction. The reduction in tariff would not be applicable to K-Electric and lifeline consumers of other distribution companies using less than 50 units per month.

POWER PROJECT: Earlier, Nepra had not allowed inclusion of generation cost of the Nandipur power project to be passed on to the consumers because its reference tariff had not been approved. On Wednesday, it took up the petition filed by the Northern Power Generation Company which sought gas-based total tariff for the power project at 12.5 cents per unit, diesel-based total tariff at 41.23 cents per unit and furnace oil-based tariff at 26.83 cents per unit. While expressing concern over the rising cost of the Nandipur plant to Rs90 billion, Nepra reserved its judgment on the issue. Nepra was informed that the project cost had now been estimated at $847 million.

Answering a question, Nandipur project’s managing director Mohammad Mahmood said that delays and corruption in the implementation of the project had resulted in escalation of the cost. He said the plant’s efficiency had also been affected because the plant and machinery had remained stuck at Port Qasim for a long time. Mr Mahmood requested the regulator to approve a diesel-based reference tariff of Rs41 per unit, furnace oil tariff of Rs27 and gas-based tariff of Rs12.5 per unit. Nepra officials asked why the project cost was being verbally quoted at Rs57 billion when official documents put the cost at $847 million.

Mr Mahmood confirmed that the actual cost of the project was $847m but the PC-1 of the plant worked out local currency cost at Rs57bn on the basis of an exchange rate of Rs67 per dollar. Mr Mahmood also said that some companies had recently been paid at an exchange rate of Rs102 to a dollar. Nepra officials said it was a serious matter and the escalation of project cost needed to be justified. It said the cost escalation had resulted because of fault on the part of the government and its burden should not be passed on to consumers. -dawn