ISLAMABAD: The National Electric Power Regulatory Authority reduced on Thursday electricity rates by Rs2.68 per unit for all distribution companies on account of monthly fuel adjustment.

The Central Power Purchasing Agency (CPPA) had requested a cut of Rs3.29 per unit in the tariff because of lower generation cost in May and weak international oil prices.

At a brief public hearing presided over by Nepra Chairman Tariq Sadozai, the regulator decided to pass on the relief to consumers by retaining 60 paisa per unit cost to recover gas infrastructure development cess (GIDC) and allow a reduction of Rs2.68 per unit.

Nepra said that by not allowing 60 paisa per unit reduction, the power companies would be able to recover Rs5.11 billion on account of GIDC they had paid to independent power producers. At a previous hearing the regulator had decided to recover from consumers Rs11bn on account of GIDC backlog when the tariff was on the lower side.

The reduction in tariff would be passed on to consumers in the billing month of September. The reduction would not be for consumers using less than 300 units per month and it will not apply to K-Electric consumers.

Nepra was informed that major reduction in fuel cost was because of lower international oil prices and increased hydropower generation than assumed at the time of approval of reference tariff for May. The CPPA said the reference fuel charges had been approved at Rs8.098 per unit, but the actual fuel charges worked out at Rs4.81 per unit, thus requiring a cut of Rs3.29 per unit.

It was reported that hydropower sources contributed over 35.35 per cent sold in May. This was followed by 28.68pc contribution of power plants using furnace oil at a fuel cost of Rs9.92 per unit.

The third major generation of about 28pc was from plants using gas at the fuel cost of Rs5.57 per unit. About 4.66pc generation came from nuclear power plants with Rs1.18 per unit cost. The most expensive generation came from plants using high-speed diesel with a fuel cost of Rs13.88 per unit.

Published in Dawn, July 17th, 2015