Nepra approves Rs4.4bn refund to Discos’ consumers

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) Monday approved a refund of Rs 4.4 billion @ paisa 44 per unit, to the consumers of Discos using above 300 units in April 2021 under monthly fuel adjustment mechanism.

On June 2, 2021, Nepra conducted hearing on CPPA-G’s tariff adjustment request wherein it sought the Regulator’s nod to refund Rs 8.5 billion at the rate of Paisa 84 per unit to the consumers of Discos overcharged in April 2021 under FCA mechanism.  

During the hearing a fiery discussion was witnessed between the regulator and officials of National Power Control Centre (NPCC) on “operational mystery” of RLNG-fired efficient power plants.  

Nepra’s team argued that NPCC failed to follow Economic Merit Order (EMO) which is overburdening the consumers. On the contrary, NPCC team argued that SNGPL is not supplying required RLNG to run plants at the time of requirement due to which expensive power plants are run to meet demand.  

NPCC/NTDC during the hearing, explained operation of power plants on RFO, however, the Authority observed that an in-house analysis has also been carried out to work out the financial impact due to deviation from EMO based on the information submitted by NPCC. As per the in-house analysis/workings carried out, the net amount deductible, on provisional basis, from the overall claim due to deviation from EMO due to underutilization of efficient power plants worked out at Rs.159.21 million. The Authority has decided to deduct this amount provisionally in the April’s FCA, until NPCC/NTDC and CPPA-G provide the required details along with complete justification in this regard to the satisfaction of the Authority.  

The regulator has approved negative FCA of (Rs.0.4371/kWh), having benefit of Rs.4.4 billion for consumers using over 300 units months.

However, Rafique Ahmad Shaikh, Member Nepra (Sindh), in his additional note, observed that directions of Authority to CPPA-G/NPCC are not being implemented since around fourteen months, which is tantamount to shying away from discharging their duties, which has great financial implications. He further noted that non-supply of RLNG is an issue of governance and can be managed through efficient supply chain management.

Citing the reason of over 100 per cent deduction in refund of Rs 8.5 billion requested by CPPA-G in its tariff adjustment request, the regulator argued that in its earlier FCA decisions for the months of August and October 2020 it provisionally deducted Rs.7.5 billion on account of deviation from EMO. However, based on the information/data submitted by NPCC/NTDC, the Authority has reworked the impact and has decided to allow Rs.4.4 billion out of the previously withheld amount. This adjustment has been included in the FCA of April 2021, which resulted in reduction in negative FCA to (Rs.0.4371/kWh).

The FCA of April 2021 shall be charged in the billing month of June 2021 to all consumer categories of Discos, except life line consumers i.e. having consumption up-to 50 units, domestic consumers consuming up-to 300 units and agriculture consumers of all Discos. It was clarified that 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.

Further industrial consumers availing Industrial Support Package (ISP) will not get the benefit of negative FCA on incremental sales only. They will however, get the benefit of negative FCA on base tariff billed units.

This FCA would remain applicable only for one month. This FCA is not applicable to KE consumers.—MUSHTAQ GHUMMAN