NEPRA to raise Rs 300m per month burden on power consumers with ministry - Pakistan Today

NEPRA to raise Rs 300m per month burden on power consumers with ministry

The National Electric Power Regulatory Authority (NEPRA) is likely to raise the issue of burdening electricity consumers with an enormous Rs 300 million per month due to the violation of the economic merit order for electricity generation with the Ministry of Water and Power (MOWP).

An informed source said NEPRA is likely to raise the issue with the ministry, as its subordinate departments, the National Transmission and Despatch Company (NTDC) and Central Power Purchasing Agency (CPPA) have offered no explanation on the violation of the economic merit order (EMO).

NEPRA had sought answer from NTDC and CPPA on April 4, when during the monthly fuel price adjustment hearing it transpired that the expensive electricity from diesel based power plants was being purchased instead of half priced furnace oil ones. The authority was of the opinion that NTDC or CPPA or their respective boards were not authorized to make changes in EMO.

NEPRA had termed it’s a big financial crime and warned that it would not allow its continuation. NTDC and CPPA were asked to furnish their reply in writing, the source said adding that both the entities have evaded giving any response to the regulator.

As the entities are under the jurisdiction of MOWP, so it is under considered to take up the matter with the ministry, as violation of EMO is burdening the electricity consumers by Rs 300 million every month. NEPRA is not ready to allow any violation of EMO, the source added.

The regulatory authority had noted that EMO was strictly being followed in giving power dispatch to all thermal power plants including GENCOs and IPPs and no power plant was to run out of merit as categorically certified by NPCC (NTDC) on monthly basis.

However, the authority noted that the economic despatch order for the fortnight from 16 to 29 February 2016, available on NTDC website, showed a foot note which read, “The merit order is prepared keeping in view the environmental and economic parameters of the generating units as approved by BOD CPPAG on Feb 18, 2016”.

NEPRA directed NTDC and CPPA to explain the reasons regarding the foot note appearing on the EMO available on its web site which, prima facie, does not seem to be in accordance with the definition of EMO as per NEPRA Licensing Generation Rules 2000. The authority had noted with great concern that cheaper plants were not fully utilized and resultantly expensive plants have been operated which have resulted in higher pool fuel charges.

It is important to mention NEPRA had issued several directions to CPPA and NTDC during the hearings and in its monthly FCA decision of December 2015 and January 2016 to provide real time access of NPCC’s data, details of fortnightly merit order effective August 2015 and explain the reasons for non-utilization of cheaper plants at their optimum capacity and for running high cost HSD plants whereas certain cheaper plants were not completely utilized.

NEPRA had also sought details of the load of the remaining power plants for every hour in which diesel power plants were run both for the months of December 2015 and January 2016.

Explanation was sought on reasons for carrying out load shedding in the country, if the power plants were operated on partial load due to less demand in the system, as certified by NPCC. Along with details of plants which could not be run due to transmission constraints and why the disputes with efficient Japan, Saba and SEPCOL power plants were not being resolved.

It is also important to mention that at NEPRA hearings only representatives from CPPA, NPCC and NTDC are present while no representative from WAPDA Power Privatization Organization (WPPO), Sui Southern Gas Company Limited (SSGCL), Sui Northern Gas Pipelines Limited (SNGPL), Ministry of Water and Power and Ministry of Finance attends the hearing.

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