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NEPRA refuses Rs2.97 per unit increase in tariff

NEPRA refuses Rs2.97 per unit increase in tariff

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) refused to pass on Rs2.97 per unit increase to power consumers on account of monthly fuel adjustment following electricity generation produced through expensive furnace oil.

The power producers had caused additional burden of over Rs7 billion on power consumers due to generation of expensive electricity in violation of merit order.

The power regulator has rescheduled public hearing on Tuesday next week and sought explanation for violating merit order.

Nepra in a public hearing conducted on Wednesday took strong notice of violation of merit order by power producers. These power plants produced energy by using furnace oil while ignoring use of Liquefied Natural Gas (LNG) and coal that resulted in putting burden of Rs7 billion on power consumers.

The power regulator sought an explanation regarding the generation of expensive electricity by using furnace oil in power plants and suspended the hearing till Tuesday next week.

The regulatory body announced not to decide the matter of increasing power tariff on account of monthly fuel adjustment unless Central Power Purchasing Agency (CPPA) gave solid reasons for running power plants on expensive fuel.

Nepra authorities noted that an amount of Rs7.20 billion could be saved by running power plants based on coal and Regasified Liquefied Natural Gas (RLNG) with better efficiency.

Nepra chairman expressed serious concerns over use of expensive fuel in power plants in violation of merit order and asked what the justification of hearing is if the merit order is violated.

He said the national exchequer had suffered a loss of Rs7 billion by violating merit order and asked CPPA authorities to sit with Nepra officials to determine the reasons for violating the merit order.

Interestingly, CPPA officials claimed that billions of rupees had been saved by running power plants on furnace oil, which Nepra had termed a violation of merit order as cheaper fuel was not consumed in power plants to save money. They said that furnace oil-based power plants helped reduce power load shedding by one hour.