FCA for September: Nepra authorizes rupee price hike of 2.53 rupees for nightclubs – Markets

ISLAMABAD: The National Electricity Regulatory Authority (NEPRA) on Tuesday increased the tariffs of electricity distribution companies (Discos) by 2.53 rupees per unit for September 2201 in order to recover 34 billion rupees under the monthly fuel component adjustment mechanism (FCA).

This increase will be in addition to Rs 1.68 per unit increase in the base tariff for domestic consumers across the country.

According to a notification, the mark-up will apply to all categories of consumers except discotheque lifeline consumers. The adjustment will be reflected in the November 2021 bills. NEPRA Vice President Rafique Ahmad Shaikh wrote a dissenting note on the failures of the CPPA-G and NPCC to comply with the regulator’s instructions.

He argued that the CPPA-G again failed to submit the separation of financial impact under items such as: (i) fuel account impact (RLNG); (ii) system constraints; and (iii) the under-utilization of efficient power plants. As reported by the Monitoring & Enforcement (M&E) wing, the financial impact due to the fuel shortage (RLBFG) is only over Rs 1 billion.

“The cost of mismanagement cannot be passed on to consumers,” he said, adding that the huge amount under the headings of “the adjustment from the previous period” is also alarming and cannot be ignored by because of its financial impact.

The Authority also observed that CPPA-G purchased 48.269 GWh of power from Tavanir Iran in September 2021 at a cost of 633 million rupees. The Authority also observed that CPPA-G has filed its request with the Authority for the approval of the extension of the contract between CPPA-G and Tavanir Iran for the import of electricity up to 104 MW for the period from 01 January 2020 to 31 December 2021, which is under review by the Authority due to which the cost of electricity purchased from Tavanir Iran is authorized on a strictly provisional basis, subject to its adjustment once the Authority will have decided to extend the contract between CPPA-G and Tavanir Iran.

The provisionally authorized cost aims to avoid future cost accumulation and one-off consumer burden.

The CPPA-G also claimed an amount of 10.062 billion rupees due to earlier adjustments for the month of September 2021. However, the Authority verified the amount of 10.018 billion rupees, which was included in the monthly FCAs. of September 2021. The difference in the amount of 30.169 million rupees is due to the adjustment requested previously for Tavanir Iran, which was not taken into account and would only be recognized once the Authority decides of the PAR submitted by the CPPA-G in this regard. The difference of Rs 14.071 million is due to the difference between the technical factors provided by CPPA-G and the technical factors verified by NEPRA.

According to data submitted by CPPA-G, Discos purchased 16.18 GWh from captive power plants (CPPs) in September 2021, for which CPPA-G provided actual details on the energy purchased from these plants. . According to the details provided by CPPA-G, the actual cost of fueling this energy is Rs. 75.051 million, which was taken into account during the development of the FCA of September 2021.

During the hearing, the Authority also observed that, at first glance, some efficient power plants were not fully utilized and that instead, energy from more expensive RFO / HSD power plants was generated to the tune of over Rs 19.233 million in September 2021. The Authority has repeatedly requested NPCC / NTDC and CPPA-G to provide full justification in this regard, to the satisfaction of the Authority and Submit full details of the deviation from the Economic Merit Order (EMO), showing hourly production as well as the financial impact of the deviation from EMO, if any, and the reasons for it this.

The NPCC / NTDC during the hearing, explained that the operation of the power plants on RFO / HSD is due to the increase in demand, the failure of HBS and the non-availability of the RLNG in accordance with the requirements. . The NPCC explained that the RLNG quota allocated to the electricity sector was around 650 MMCFD while its needs exceeded 900 MMCFD. The representative of the Ministry of Energy (MoE), explaining the reason for the decrease in the RLNG allocation, indicated that RLNG Terminal 1 was in dry dock from September 14 to 17. The representative of the Ministry of the Environment also explained that out of the 1200 MMCFD RLNG at the two terminals, around 800 mmcfd are allocated to SNGL and that they are distributed according to their order of merit for the electricity sector, fertilizers and CNG, there is therefore a supply constraint. After investigation, the representative of the Ministry of the Environment explained that the domestic sector is the top priority and the electricity sector is the second on the list.

Based on the submission, the Authority asked if the quota of SNGL is only 800 MMCFD, then how can it meet the demand of 950 MMCFD. The Environment Ministry, while agreeing with the Authority, said that until the addition of new terminals, the supply problem persisted. The representative of CPPA-G explained that SNGPL has a firm supply agreement with only the QATPL, HBS and Balloki power plants, and for the others, it supplies RLNG based on availability. Due to an open contract with other RLNG based power plants, SNGPL cannot plan its RLNG supply.

The Authority asked what it should do with the delta due to the non-availability of the RLNG, explained the financial director CPPA-G in the event of a firm contract in the event of less demand, the plants would obtain RLNG, this which would also lead to a delta for consumers. as in this case, we have to pay the RLNG firm supply cost. On the issue of the non-firm contract, the Authority stated that in this case, SNGPL can procure RLNG on the spot market basis if the Power division submits its request to the Petroleum division.

The Autorité also questioned NTDC’s performance in terms of removing technical constraints. After investigation, the NPCC explained that they were working on the constraints aggressively, which is evident from the fact that the stress load shedding compared to the previous year has decreased by 25 percent.

However, the Authority observed that an internal analysis was also carried out to determine the financial impact due to the deviation from the EMO on the basis of the information submitted by the NPCC. According to the analysis / internal work carried out, the net deductible amount, on a provisional basis, of the overall claim due to the deviation from the EMO due to the underutilization of efficient power plants amounts to to 785.64 million rupees.

The Authority has decided to provisionally deduct this amount in this FCA, until NPCC / NTDC and CPPA-G provide the required details as well as full justification in this regard to the satisfaction of the Authority.

In addition, during the examination of the FCA request, the Authority observed that a partial load was supplied to the Balloki, HBS and QATPL plants even during the forced outages and the failure of the shipment (FADL ), which is a non-performance / fault of the said electricity producers. The Authority is of the opinion that part load can only be provided if the facility is available, but NPCC ships it part load due to system requirements. Likewise, partial load cannot be provided if the factory fails to complete the shipment prescribed by the NPCC. Therefore, an amount of Rs. 30.92 million (Rs. 26.27 million for Balloki, Rs. 04.17 million for Bhikki and Rs. 0.48 for HBS) for the month of August 2021 has been deducted as of Partial Charge charges, while calculating the FCA for August 2021.

According to NEPRA, the amount resulting from the application of the PPA factors, for the six PPIs based on the RFOs, incorporated as part of the 2002 energy policy, is authorized on a provisional basis and will be subject to adjustment, depending on the result. final of the current motorcycle suo. PPI lawsuits based on RFOs.

NTDCL, reported provisional T&T losses of 357.18 GWh, or 2.56% based on the energy delivered to the NTDCL system in September 2021, or 13,952 GWh. NTDC also reported T&T losses of 19.99 GWh for the PMLTC (HVDC) line.

The Authority, after incorporating the aforementioned adjustments, examined and assessed an increase of Rs 2.5272 / kWh in the applicable rate for nightclubs due to variations in fuel charges for the month of September 2021.

Copyright Business Recorder, 2021

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