Home »Fuel and Energy » Pakistan » Nepra chief vows to deliver despite pressures
National Electric Power Regulatory Authority (Nepra) on Wednesday acknowledged that it is facing pressures without naming any entity but showed determination to continue its responsibilities with the same zeal. This message was conveyed by Chairman Nepra, Tauseef H Farooqi hours before a scheduled meeting between the country's top investors/businessmen with the Army Chief, General Qamar Javed Bajwa. One of the top businessmen told Business Recorder that the issue of NAB came under discussion during the meeting.

Saif Ullah Chatha, Member (Punjab), Engineer, Buhadar Shah also assisted the Chairman. In a public hearing, Nepra approved an increase of Rs 1.66 per unit in electricity prices for August 2019 under monthly fuel price adjustment which will put additional financial burden of Rs 22.60 billion on the consumers across the board. The impact of this increase will be passed on to the consumers in November bills.

Central Power Purchasing Agency Guaranteed (CPPA-G) had sought an increase of Rs 1.87 per unit to recover Rs 25.7 billion from consumers. Nepra, in its State of Industry Report 2018-19 released recently stated "almost all the projects on which Nepra had made determinations in the past have been questioned by NAB, and the way the investigations are being conducted, it has completely stifled the morale of Nepra professionals."

When a journalist claimed that there are speculations in the market that Nepra has not notified the FCA determination of July 2019 due to pressure from NAB, which is already probing almost all the power projects, Chairman Nepra replied "there are pressures but Nepra is doing its work and will continue to work; there is no doubt about pressures but we are doing our work".

He maintained that Nepra will expedite its work and if an impression is circulating in the market that things are being delayed due to pressure, the regulator must deal with it through prompt actions. Member Tariff, Saif Ullah Chatha said that when an external agency starts monitoring staff then the officials become careful.

In reply to a question whether Nepra took little time to announce the determination of quarterly adjustment and changes to distribution margin on a provisional basis on the request of the federal government (which will hit the consumers), Chairman Nepra concurred saying that he received a request from the highest level for announcement of determination before September 30, 2019 to meet a deadline of International Monetary Fund (IMF).

"It did not seem appropriate to announce a determination in haste. Let me be honest with you, I was requested by the highest level to do this; I was told later we have to fulfil a condition of IMF by September 30. It was a national commitment made to the IMF; hats-off to my guys, who worked day and night to complete this task. If we didn't do this there could have been serious implications for Pakistan. I am ready to work for Pakistan and if criticism comes, I will take it as complement," he added.

Chairman Nepra further stated that he would expedite stamping ("thapas") on decisions in future. According to the Central Power Purchasing Agency (CPPA), 40.33 percent electricity was produced from hydropower plants in August, 22.89 percent from imported LNG, 13.34 percent from coal, 11.87 percent from local gas, 4.66 percent from atomic sources and 3.60 percent from furnace oil.

Nepra's tariff team claimed that CPPA-G generated around 505.921GWh from furnace oil based plants costing Rs 6.330 billion, ie FCC of Rs 12.5111/kWh. "Had the units generated on furnace oil be generated from coal based power plants, the total fuel cost for such units would have been around Rs 2.8 billion, thus resulting in reduction in total fuel cost by around Rs 3.4 billion ie Rs0.2555/kWh," he added.

The Authority directed CPPA-G that in future such details along with analysis showing financial impact of non-utilization of efficient power plants along with the monthly FCA data be compiled. No such analysis is provided with the FCA request. CPPA-G had also sought previous adjustments of Rs 2.126 billion but Nepra allowed only Rs 603 million and refused to allow remaining claims with respect to 1994 IPPs adjustment, NPGCL, Nishat Power, Foundation, Orient,Nishat Chunian , Saif Power, Saphire, Hubco and Liberty Power due to insufficient documentary evidence. Chief Financial Officer (FCO), Rehan said that CPPA-G will provide certified claims of Rs 1 billion to Nepra.

However, Nepra approved claims of Rs 10.018 billion with respect to supply of mixed energy as per the policy. CFO, CPPA-G also stated that the Authority did not notify the impact of Rs 28 billion in July, fearing that passing on the FCA adjustment of July and August may have socio-economic consequences. He argued that a delay in notifications have a financial impact on the power sector.

Chairman Nepra maintained that CPPA-G and NPCC should complete their own homework and provide justification prior to filing FCA petition to ensure informed decisions may be taken instead of putting pressure on the regulator. The officials of CPPA-G and NPCC disagreed with each other with respect to some calculations and assumptions.

Copyright Business Recorder, 2019


the author

I did graduation from the Government Murray College Sialkot and MSc in Psychology from the University of Punjab. I am in journalism since 1990. I worked in Daily Nawa-i-Waqt as sub editor and staff reporter in Daily Pakistan and Daily Din prior to joining Daily Business Recorder. I have been associated with this newspaper since 2000 as staff reporter. Energy Sector, Commerce / Trade and Industries are key areas of my interest. I have also the credit of exposing number of scams like Rental Power Plants (RPPs), LNG, sugar import, etc.

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