ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has expressed its annoyance with the Power Division and its affiliated agencies, criticizing them for not conducting any studies to update the power system in line with shifting demand patterns.
“The financial impact of partial load has surged by Rs 9 billion due to changes in demand, resulting in an average increase of Rs 300 million per month. We expected the Power Division to step in with guidance when the demand pattern began to shift. If necessary, a study should have been commissioned to adjust the Time of Use (ToU) tariff to match the changing demand, as peak usage times have moved,” stated NEPRA Chairman Chaudhary Waseem Mukhtar, during a public hearing regarding CPPA-G’s request for Fuel Cost Adjustment (FCA) for November 2024. This request includes a negative adjustment of Paisa 63 per unit, which would result in a refund of Rs 4.891 billion to consumers.
Chairman Mukhtar noted the absence of representatives from the Ministry at the hearing and indicated that he would include this issue in NEPRA’s final decision. He also directed CPPA-G to carry out a study to align the ToU tariff with the updated demand. He further remarked that the lack of action from government entities often leads to criticism being aimed at the power regulator. CPPA-G CEO, Rihan Akhtar, agreed with the Chairman’s assessment, confirming that the load pattern has changed on an hourly basis. “CPPA-G is actively addressing this issue and will bring it to the Authority sooner than planned—either as part of the next tariff re-basing petition or even earlier. While the issue was initially targeted for the next re-basing, it will now be addressed sooner, or at least during re-basing, because the existing ToU tariff no longer reflects the real demand. The original cost model for the ToU is outdated, and tariff modeling needs to be updated,” he said.
Chairman Mukhtar also referenced a letter from the Power Division, which stated that the government intends to submit a tariff re-basing petition in January or February 2025. This petition will urge CPPA-G to modify tariff structures in line with the changing demand.
In response to a query from Member KPK Maqsood Anwar Khan about the impact of the winter incentives package, a CPPA-G official revealed that additional consumption of 45 million units had been recorded up to December 26, 2024.
Member Finance and Tariff, Mathar Niaz Rana, expressed concerns about the zero plant factors of coal-fired power plants, calling it a troubling situation. He pointed out that two key plants have not received any orders despite having a 90-day inventory. This lack of operation results in higher costs for consumers, as the plants receive working capital at 80-100% of the expected plant factor. He questioned whether working capital allocations should be linked to actual plant performance rather than a fixed rate, criticizing a system where plants are paid higher tariffs without producing electricity.
The CEO of CPPA-G agreed with the concerns raised by Rana but clarified that the inventory requirement is actually 60 days, not 90. He attributed the issue to ongoing circular debt but justified the position of Independent Power Producers (IPPs). He also mentioned that steps are being taken (though not specifying the Energy Task negotiations) to align working capital costs with actual inventory, and adjustments will be requested through NEPRA. He stated that while no changes are expected for imported coal projects, discussions are ongoing for other projects.
On the issue of Power Load Adjustment Charges (PLAC), which pass on the impact of load factors to consumers, CPPA-G’s CEO suggested that licensees such as Gencos, Discos, and IPPs should adjust their meters to reflect actual conditions.
It was also disclosed that the current circular debt stands at Rs 2.38 trillion, with outstanding payables to Independent Power Producers (IPPs) totaling Rs 1.6 trillion.
