ISLAMABAD: Expressing displeasure over imprudent financial policy and management practices in power companies, the National Electric Power Regulatory Authority (Nepra) on Tuesday directed all the distribution companies of Water and Power Development Authority (Wapda) to refund Rs3.23 per unit to consumers for overcharging them in January.

At a public hearing presided over by Nepra chairman Tariq Saddozai, the Central Power Purchasing Agency (CPPA) sought a cut of Rs1.62 per unit in tariff because of lower-than-estimated fuel prices in January.

The regulator, however, did not allow an 11-year-old claim of Rs9.8 billion filed by the CPPA on behalf of power companies and partial load charges for some private producers in violation of power-purchase agreement.

Mainly because of these disallowances, regulator worked out a relief of Rs3.23 per unit to be given to the consumers instead of Rs1.62 per unit proposed by the CPPA. This would result in a Rs21bn relief to the consumers in the next billing month.The tariff adjustments were allowed after public hearings under monthly fuel adjustment that required transfer of actual fuel cost of power generation to consumers. The change in electricity rates would not be applicable to agricultural and residential consumers with less than 300 units of monthly consumption, and to K-Electric.

The public hearing once againbrought to the limelight the unending controversies surrounding the Nandipur Power Project. It was reported to the house that reference fuel component approved by the regulator for Nandipur for January was Rs4.948 per unit, but the CPPA claimed a rate of Rs8.297 per unit.

Mr Saddozai said the regulator could not allow such rates given the fact that the Nandipur`s basetariff had not been notified by the government. `This is not only adding to your debt servicing cost, but would also suddenly burden the consumers,` he said, explaining that a rightful cost of Rs300-400 per month could not be built to tariff in the absence of a tariff notification. The amount has accumulated to Rs2.5bn by now since March 2016, he said.

He was joined by Nepra mem-ber Himayatullah, who said Rs9.8bn worth of bills had been claimed by the CPPA on account of an 11-year-old adjustment and without providing its evidence.

They asked the CPPA chief Muhammad Rehan if his organisation had certified the old bills and verified them.

Mr Rehan said the National Power Generation Company Ltd had claimed the bills for 2006 owing to late notifications and these claims were genuine, but said the evidence could not be certified at the moment. He, however, requested the amount be charged to consumers and if found to be inaccurate on verification, this could be adjusted in a subsequent month.

The Nepra members said the cost of this `efficiency` for claiming a bill after 11 years could not be billed to consumers without verification and certification and hence would not be permissible at this stage.

Nepra also reported that it had allowed Rs1bn temporary charges of Rslbn in July, of which only Rs284 million could be verified and hence another refund of about Rs726m.

The regulator also took strong exception to violation of merit order during the month in utilisation of various fuels at Kot Addu, Muzaffargarh, Orient, Saif, Saphhire and Halmore power plants and decided to take up the matter at the highest level toensure thatgas shouldbe provided to the most efficient plants for better output.

The representatives of the CPPA and National Transmission and Despatch Company confirmed that they had been requesting the gas supply to efficient power plants but the petroleum ministry had not obliged.The reduction in actual generation cost was mainly because of dip in global oil prices. It was reported that the cheapest source, i.e.

hydropower, could contribute only seven per cent to the totalgeneration against estimated 13pc, and the gap was met through higher diesel and nuclear contribution.

Under the practice in vogue, the distribution companies are charging higher estimated fuel charge topower consumers, which is later adjusted against actual cost in a subsequent month with the approval of the power regulator.

The CPPA said the actual generation cost was lower and hence extra money collected from consumers needs to be refunded through adjustment in the next billing month under automatic fuel pass-through mechanism.

It was reported that the fuel cost of electricity deliv-ered to distribution companies stood at Rs44bn at an average cost of Rs8.24 per unit in January against the reference price of Rs9.867 per unit, which suggests that consumers were entitled to reimbursement of Rs1.62 per unit.

The total energy generated in the country from all sources stood at 6,913 gigawatt hours. The CPPA supplied 6,631 GWh to the distribution companies at a cost of Rs54bn.