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Nepra raises power tariff by Rs1.51 per unit

The National Electric Power Regulatory Authority (Nepra) has increased the power tariff by Rs1.51 per unit on account of monthly fuel adjustment for May 2012.

Fuel used for electricity generation is a pass-through item and in May, 59.30 billion units of electricity were sold to electric power distribution companies. These companies now stand to collect Rs45 billion from end consumers in view of the increased fuel costs. The higher tariff will be applicable to all types of consumers in December. Lifeline consumers and consumers of the Karachi Electric Supply Company will, however, be exempted from this tariff increase.

In his dissenting note regarding the Nepra notification, Shaukat Ali Kundi, member of Nepra from Khyber Pakhtunkhwa, said that electricity consumers are being exposed to a continual increase in power tariff just because public sector thermal power plants generate costly electricity. He also complained that Nepra has repeatedly asked public sector generation companies to sign fuel purchase agreements, despite that they have failed to do so. Kundi also highlighted the fact that public sector powerhouses are unable to prevent furnace oil theft, which swells electricity generation costs.

Kundi pointed out that generation companies are kept on standby mode for 3- 11 months a year on the directives of the National Power Control Cell, whereas as per standard operating procedures, power plants are meant to be kept on standby mode for a minimum period. Besides, he wrote, almost 50MW of electricity are being used from the national grid to keep generation companies on standby mode, further burdening the end consumers.

Nepra has also directed the Central Power Purchase Agency to ensure that the generation companies and distribution companies sign electricity purchase agreements to ensure transparency.

Public sector power plants are currently producing only 1,500MW of electricity but are receiving capacity payment on 3,766MW of electricity generation. This is the reason consumers end up paying Rs3.10 billion per month.

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