ISLAMABAD: The National Transmission and Despatch Company (NTDC) on Wednesday challenged the legal jurisdiction of National Electric Power Regulatory Authority (Nepra) after it blocked NTDC’s attempt to recover Rs36 billion in losses from loyal power consumers.
NTDC claims Nepra has continuously deducted the amount from their claims since September 2019, preventing the funds’ recovery.
The NTDC challenged the jurisdiction of Nepra, in a public hearing on the petition of state-run power distribution companies (Discos) that had sought the regulator’s permission for collecting an additional Rs2.0536/unit from consumers in their July 2023 bills.
The sole power transmission company in the country asserted that power theft at its two transmission lines in south regions caused this staggering loss.
NTDC officials contended that the regulatory body lacks the legal authority to deduct these substantial amounts. This assertion further fueled the tension between the two entities, leading to an intense exchange between the officials. Infuriated by the claim, Nepra chairman suggested that NTDC officials should take their case to the court of law, emphasising that Nepra’s primary responsibility was to safeguard the interests of consumers.
Furthermore, the power dispatch company is seeking the recovery of an additional Rs1.6 billion from consumers, but Nepra has shown reluctance in approving this demand. NTDC officials argued that if the fresh demand of Rs1.6 billion is considered, the total amount owed would escalate to Rs38.8 billion.
The ongoing dispute between NTDC and Nepra underscores the significant financial implications resulting from power theft and subsequent burden on both power transmission companies and consumers.
Later, the authority also held a hearing on the Karachi-based utility that sought Nepra’s nod for a collection of Rs1.495/unit in July 2023 bills. These pleas were made under the monthly fuel charges adjustments (FCAs) for May 2023. The requests were based on consumers paying less than the actual power generation cost, particularly due to the use of imported gas and oil.
After holding both public hearings, Nepra indicated allowing the Discos to collect an additional Rs1.90/unit, which will have a financial burden of Rs22.6 billion in July bills. The K-Electric was also preliminarily hinted to collect an additional Rs1.45/unit from its clients in the same month. Its impact would be around Rs2.6 billion to be collected from Karachiites in one month.
Interestingly, during the hearing, it comes to the fore that Sahiwal Coal Power Plant was involved in a controversy over importing expensive coal for the plant. It imported 200,000 tons of coal at the cost of Rs85,000/ton (totaling Rs17 billion) and was stored for months. During the hearing, it was informed that CPPA was reluctant to accept electricity generated using this expensive coal as it will violate the merit order.
However, it was accepting electricity generated with coal costing Rs45,000 per ton. It was informed that they were working on a formula to calculate the weighted average cost of coal for generating electricity.
Meanwhile, K-Electric’s spokesperson said that FCAs are approved by the regulator, Nepra, after scrutiny and public hearings. These hearings are conducted independently for K-Electric and state-owned entities (XWDISCOs). The authority also specifies the month during which the charge is applied to customer bills. FCA depends on fuel prices and changes in the generation mix used to produce electricity, and it is passed on to customer bills according to Nepra’s rules and regulations and the government of Pakistan’s prescriptions. The positive FCA for May 2023 is primarily due to a slight increase in fuel prices, power purchased from CPPA-G, and changes in the generation mix used for electricity production, following the Economic Merit Order. In May 2023, the price of furnace oil increased by three percent, the price of power purchased from CPPA-G increased by four percent, the price of RLNG purchased from Pakistan LNG Limited (PLL) decreased by four percent, and the price of RLNG from SSGC increased by three percent. Nepra has reserved the judgment on both petitions and will announce it after further scrutiny of the data.
