ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday ordered all ex-Wapda distribution companies of to refund Rs2.23 per unit to consumers this month for overcharging themin June.

At a public hearing, presided over by Vice Chairman Saifullah Chattha and attended by three other members, Nepra concluded that a relief of Rs2.23 per unit be passed on to consumers in the upcoming billing in view of lower than estimated international oil prices and favourable energy mix.

Under the practice in vogue, distribution companies charge significantly higher estimated fuel cost to power consumers and later adjust against actual cost in a subsequent month with the approval of the power regulator. This helps the power companies to collect billions of rupees from consumers in advance and have better cash flows without financing costs.

The relief in electricity rates would not be applicable to agricultural consumers and residential consumers with less than 300 units of monthly consumption under a decision of the PML-N government on the grounds that these categories are already being provided subsidised electricity and hence do not qualify for monthly fuel price cut.

The Central Power Purchasing Agency (CPPA-G) had filed on behalf of all exWapda distribution companies a petition before the regulator for Rs2.13 per unit refund to consumers to pass on the impact of international oil prices and better energy mix. The impact of lower oil prices was estimated at Rs13 billion while the savings on account of better water availability and coal-based power generation was put at Rs12 billion.

It was reported by Nepra case officers that the reference tariff for the month of June was set at Rs6.8283 per unit as fuel cost but actual cost amounted to Rs4.6783 per unit. Therefore, Rs2.15 per unit be refunded to consumers.

However, during the hearing representatives of the CPPA reported that a double entry of Rs952 million on account of adjustments for Rousch Power had been errone-ously made which should be corrected. As a consequence, Nepra approved Rs2.23 per unit reduction in tariff with a total financial impact of about Rs26 billion.

In its petition, the CPPA reported to the regulator that it had charged a higher reference tariff of Rs6.83 per unit to consumers in June but actual fuel cost turned out to be Rs4.70 per unit. Therefore, there was a legal requirement to return Rs2.134 per unit to consumers.

The petitioner said that about 11,458Gwh (Gigawatt hours) were generated in June and 11,210Gwh could be delivered to distribution companies due to about 2.04 per cent system losses.

It said that the cheapest source of hydropower production had a healthy contribution to overall energy mix in June and stood at 30.5pc. The hydropower has a zero fuel cost.

Wind and solar plants together contributed about 2.2pc energy at no fuel cost.

The power generation from furnace oilbased power plants amounted to 22.34pc at a cost of Rs9.5 per unit. Likewise, the natural gas-based generation was lower at 18.43pc in June at a cost of Rs4.26 per unit.

The generation from imported liquefied natural gas (LNG) also had a healthy 12.28pc contribution in the overall power supply at a rate of Rs7.45 per unit.

With the induction of Sahiwal Coal power project in the system, the overall energy contribution from coal increased to 5.7pc, from usual one per cent, and its fuel cost of generation stood at Rs4.3 per unit. Nepra was informed that the plant`s production had gone beyond 1,100MW but it was still in testing phase and contributing energy intermittently till it achieved formal commercial operation date (COD) soon.

The most expensive generation came from high speed diesel at Rs14.36 per unit with a contribution of 1.36 per cent to the overall power supply. Import from Iran followed HSD-based expensive energy and stood at Rs10.63per unit and contributed less than 0.5pc to the energy pool.

The CPPA said that total energy was generated at a total cost of Rs50.85 billion or Rs4.44 per unit while two per cent lower supply was delivered to distribution companies at a cost of Rs52.63 billion or Rs4.7 per unit.