Tag: regulatory authority

  • Nepra approves Rs7.056 per unit hike for power consumers

    Nepra approves Rs7.056 per unit hike for power consumers

    In a setback for the already burdened public grappling with inflation, the National Electric Power Regulatory Authority (Nepra) has greenlit a fuel cost adjustment, paving the way for a Rs7.0562 per unit increase in tariffs for March 2024.

    This decision grants state-run power distribution companies the authority to impose additional charges, projecting a staggering financial burden of around Rs56 billion on consumers.

    This figure could potentially soar to nearly Rs66 billion, taking into account the 18 per cent general sales tax (GST).

    It’s important to note that this tariff adjustment is applicable across all consumer categories, except for electric vehicle charging stations (EVCS) and lifeline consumers.

    The Central Power Purchasing Agency (CPPA), representing the distribution companies, had initially sought Rs7.13 per unit in its petition.

    Earlier this month, The News highlighted the plea from ex-Wapda distribution companies (XWDiscos) seeking Nepra’s approval for the Rs7.13 per unit increase.

    This was attributed to a significant drop in hydropower production and systemic constraints, such as the incapacity of the high-voltage direct current (HVDC) transmission line to efficiently transport economically viable power from southern producers to the north.

    Amidst these developments, commentators express concern over the substantial surge in fuel costs, reaching Rs14.6206/kWh for January 2024.

    In response, Nepra has taken decisive action, initiating an investigation under Section 27-A of the NEPRA Act to uncover the reasons behind this significant fuel cost, as claimed by CPPA-G for January 2024.

  • OGRA approves massive gas tariff hike for SNGPL, SSGC consumers

    OGRA approves massive gas tariff hike for SNGPL, SSGC consumers

    In a move to address the fiscal challenges faced by Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC), the Oil and Gas Regulatory Authority (OGRA) has granted approval for a noteworthy increase in gas tariffs.

    Effective January 1, 2024, consumers of SNGPL will experience a 35.13 per cent surge, while SSGC customers will witness an 8.57 per cent rise.

    This marks the second adjustment in gas prices within the current fiscal year, following a substantial 193 per cent increase announced by OGRA, effective November 1, 2023. The decision to implement these changes is aimed at bridging the Rs98 billion shortfall collectively faced by both gas companies.

    The interim government’s initial projections aimed to collect Rs980 billion, intending to cover the estimated revenue requirements of Rs700 billion for both SNGPL and SSGC.

    The recommended average increase in the prescribed gas price is set at 23 per cent, reaching Rs1,590 per mmbtu, compared to the previous average of Rs1,291 per mmbtu determined on June 2, 2023.

    Specifically, OGRA has outlined a 50 per cent increase (Rs415.11 per mmbtu) for SNGPL, elevating the gas price to Rs1,238.68 per mmbtu, effective July 1, 2023.

    Simultaneously, the gas price for SSGC has been raised by 45 per cent (Rs417.23 per mmbtu) to reach Rs1,350.68 per mmbtu.

    The decision to increase gas prices aligns with the interim government’s commitment to the International Monetary Fund (IMF), with an agreement to announce a raise in gas sale prices by February 18, 2024.

    However, the OGRA Ordinance stipulates that if the government remains unresponsive to OGRA’s notification within 40 days, the determined tariff by the regulator will be automatically enforced.

    The recent approval underscores the ongoing efforts to address financial challenges and ensure the sustainability of the gas sector in Pakistan.

  • NEPRA exposes overbilling scandal impacting thousands of electricity consumers 

    NEPRA exposes overbilling scandal impacting thousands of electricity consumers 

    An investigative report by the National Electric Power Regulatory Authority (NEPRA) unveiled a disconcerting situation in Pakistan, affecting thousands of electricity consumers during the months of July and August this year.  

    The report disclosed that distribution companies (Discos) had billed consumers for over 40 days, a major contributor to the issue of overbilling in the mentioned months. Notably, MEPCO, followed by GEPCO, FESCO, LESCO, and HESCO, were identified as the Discos significantly involved in this overbilling, implicating all Discos collectively in this unjustified practice. 

    As a response to these findings, NEPRA recommended initiating legal proceedings against the power distribution companies, including K-Electric Limited (KEL), under NEPRA Fine Regulations, 2021. The basis for these actions lies in the violation of the provisions outlined in the NEPRA Act, Consumer Service Manual (CSM), and tariff terms and conditions. 

    Expressing concern, NEPRA emphasised the unfortunate deliberate malpractices by distribution companies undertaken to conceal their inefficiencies. These practices resulted in higher electricity bills for thousands of consumers.  

    The report highlighted the failure of Discos to adhere to the percentage checking mechanism outlined in the Consumer Service Manual (CSM), along with the unauthorised charging of detection bills, contravening Clauses 9.1 and 9.2 of the CSM, which provide a specific procedure for charging detection bills. 

    NEPRA noted with concern that detection bills charged by Discos were found to be fake and frivolous, contributing to a significantly low recovery ratio in certain Discos.  

    The authority initiated an inquiry in response to widespread complaints from consumers across the country regarding excessive, inflated, and erroneous bills during July and August 2023. A hearing was conducted on November 13, 2023, wherein CEOs of all distribution companies participated online, presenting their perspectives. 

    During the proceedings, it was observed that numerous distribution companies were charging metre readings, with discrepancies between snap readings and the readings recorded on consumers’ bills. 

    Additionally, some cases were identified where snaps of metre readings were either invisible or intentionally not taken. Monthly metre readings were reported to be taken beyond the standard billing cycle of 30 days in certain instances, leading to undue and inflated charging of upper slab bills for less frequent users and a consequent change in category from protected to unprotected. 

     

  • Nepra allows passing Rs3.53 per unit burden on power consumers

    Nepra allows passing Rs3.53 per unit burden on power consumers

    National Electric Power Regulatory Authority (Nepra) has provisionally approved distribution companies (Discos) to recover Rs32.7 billion at Rs3.53 per unit from consumers for October 2023.

    Central power purchasing agency highlighted a negative impact of paisa 20 per unit for the Fuel Cost Adjustment (FCA), which rose to Rs3.53 per unit with Rs28.33 billion added in previous adjustments.

    China Power and Thar Coal Block-1 Power also had shares in the adjustments.

    Due to a potential negative impact on consumers, there’s a proposal to stagger the amount in the winter months. Electricity sales decreased by over 10 per cent, reaching 9.63 billion units in October 2023, and a 28 per cent reduction in demand occurred compared to September 2023.

    Concerns were raised about the decline in demand, with Nepra noting alarm if it’s due to reduced industrial consumption.

    In a public hearing, the National Transmission and Despatch Company (NTDC) representative urged a review of the “disallowed mechanism” due to financial difficulties, with Rs42 billion withheld, impacting salaries and pensions.

    In terms of electricity generation, various sources contributed differently in October 2023. Hydel generation was 32.54 per cent, local coal-fired plants were 13.94 per cent, and imported coal was 3.51 per cent.

    Gas-based plants generated 7.35 per cent, RLNG contributed 20.25 per cent, nuclear sources provided 19.08 per cent, and electricity imported from Iran constituted 0.24 per cent.

    Wind and solar energy made up 3.08 per cent and 0.79 per cent, respectively. The total energy generated was 9,572 GWh at Rs8.2605 per unit, with a cost of Rs79.066 billion.

    Discos received 9,253 GWh at Rs11.4277 per unit, totaling Rs105.737 billion in October 2023. The situation raises concerns about the financial viability of power entities and their potential impact on consumers.

  • NEPRA greenlights Rs1.52 per unit hike in power tariff for Karachi residents

    The National Electric Power Regulatory Authority (NEPRA) has granted approval for an increase in the electricity tariff by Rs1.52 per unit for consumers of K-Electric.

    In accordance with the directive from the Economic Coordination Committee (ECC) in June 2023, NEPRA has issued a notification officially declaring a rise of Rs1.52 per unit in electricity charges, according to a press release.

    These adjustments will be reflected in the monthly electricity bills spanning from December 2023 to November 2024.

    A spokesperson for K-Electric clarified that NEPRA’s notification aligns with a previous ECC decision related to charges from the preceding tenure.

    In a statement, the spokesperson mentioned, “The prolonged duration in finalising KE’s tariff has contributed to the current circumstances, resulting in lower charges from Karachi compared to other regions in the country. Operating within the regulated framework of Pakistan’s power sector, KE, like other DISCOS, adheres to decisions made by the government of Pakistan and NEPRA concerning power tariffs.”

    It is noteworthy that lifeline consumers are exempted from the recent increase in charges, providing relief to this specific consumer group, the statement added.

    In a previous development this month, the Economic Coordination Committee (ECC) made a decision regarding the uniform quarterly tariff adjustments for K-Electric consumers, approving a hike of Rs1.72 per unit.

    The decision entails that the tariff rationalization guidelines previously issued to the National Electric Power Regulatory Authority (NEPRA) shall be applicable to the consumption of July, August, and September 2023, to be recovered from K-Electric consumers in December 2023, January 2024, and February 2024, respectively.

    Subsequent to this decision, the electricity tariff for K-Electric consumers will experience an increase of Rs1.72 per unit.

    Sources indicate that there will be a hike of Rs1.25 per unit in terms of quarterly adjustment from January to March 2023, while Rs0.47 per unit will be increased in terms of quarterly adjustment from October to December 2023.

    These measures are taken to ensure uniform electricity tariffs across the country, as per sources familiar with the matter.

  • NEPRA announces increase in electricity tariff, impacting November bills 

    NEPRA announces increase in electricity tariff, impacting November bills 

    In yet another unsettling development for power consumers already burdened by rising costs, the National Electric Power Regulatory Authority (NEPRA) has announced an increase of Rs0.40 per unit in the electricity tariff.  

    This adjustment, approved by NEPRA in response to the monthly fuel adjustment for September, will result in higher charges on November bills for electricity consumers. 

    It’s important to note that this tariff hike will affect all consumer categories, except for those classified as lifeline consumers and K-Electric users.  

    In October, NEPRA had previously approved a separate increase of Rs1.71 per unit in the electricity tariff, which was attributed to fuel adjustment charges (FAC) for the month of August. This increase was reflected in the bills for October. 

    Additionally, on October 3rd, NEPRA sanctioned a per-unit price increase of Rs 3.28 as part of the quarterly adjustment.  

    This adjustment will entail a recovery of Rs3.28 per kilowatt-hour (kWh) from various consumer categories within power distribution companies (DISCOs) and K-Electric over a six-month period, spanning from October 2023 to March 2024. 

  • Govt implements major gas price hike to tackle circular debt crisis 

    Govt implements major gas price hike to tackle circular debt crisis 

    On Monday night, the interim government made a significant announcement that will have a profound impact on the nation’s economy.  

    The decision involved a substantial increase in gas prices, set to take effect on November 1st, 2023. 

    Under this new pricing structure, non-protected domestic consumers will experience a substantial surge in their gas tariffs.  

    Specifically, rates will surge by a staggering 173 per cent for this category of consumers. Commercial users will see their gas prices climb by 136.4 per cent, while those in the export and non-export industries will face increases of 91 per cent and 83 per cent, respectively. 

    Further elaborating on the specifics of these changes, the revised monthly charges for protected consumers have been elevated from a mere Rs10 to a more substantial Rs400. For non-protected consumers, the monthly charges have surged from Rs460 to Rs1000, and for higher consumption slabs, the charges have escalated to a maximum of Rs2000. 

    In terms of actual consumption, the price per mmbtu will vary depending on usage. Users consuming up to 0.25 cubic metres will be charged Rs121 per mmbtu.  

    Those using up to 0.5 cubic metres will pay Rs150 per mmbtu; users with a monthly consumption of 0.60 cubic metres will incur charges of Rs200 per mmbtu; and those utilising 0.9 cubic metres will see rates set at Rs250 per mmbtu.  

    The steepest increase is witnessed by individuals using 1 cubic metre of gas per month, as their charges have surged from Rs400 per mmbtu to Rs1,000 per mmbtu. Users with gas consumption up to 1.5 cubic metres, previously paying Rs600 per mmbtu, will now be required to pay Rs1,200 per mmbtu starting from November 1st. 

    The changes in gas pricing also extend to small commercial users, such as local tandoors, who will be paying Rs697 per mmbtu from the aforementioned date.  

    The power sector will experience a range of charges, with rates fluctuating between Rs1,050 and Rs3,890 per mmbtu, while the cement industry will be subject to a consistent rate of Rs4,400 per mmbtu. 

    As for the export industry, gas pricing has been set at Rs2,100 to Rs2,400 per mmbtu, while non-export industries will be required to pay between Rs2,200 and Rs2,500 per mmbtu. These significant adjustments have been made to alleviate the burden on the nation’s economy. 

    The Power Division, in an official statement, justified the increase in gas prices by referencing the recommendations of the Oil and Gas Regulatory Authority, which sought to prevent an additional burden of Rs400 billion on the already burgeoning circular debt.  

  • Electricity tariff for K-Electric consumers increased by Rs4.45 per unit 

    Electricity tariff for K-Electric consumers increased by Rs4.45 per unit 

     
    Residents of Karachi are set to see an increase in their electricity bills, as the National Electric Power Regulatory Authority (Nepra) has recently decided to raise the power tariff by Rs4.45 per unit for consumers of K-Electric (KE).  

    The decision to elevate electricity rates, as outlined in a notification from the Power Division, was made during the initial quarterly adjustment of the preceding fiscal year. 

    Moreover, additional charges from KE consumers will be applied to their October and November 2023 bills, as specified in the notification. 

    Simultaneously, in response to a request from KE, Nepra has granted approval for the inclusion of actual or prudent expenses associated with the temporary operation of Unit-3 of Bin Qasim Power Station (BQPS-I) from May 1 to August 15, 2021, in the cost calculations. 

    Consequently, prior determinations made by the Authority on September 15, 2021, and May 12, 2022, concerning this matter have been adjusted to accommodate this modification. 

    “In view of the foregoing, the Authority hereby decides to accede to the request of KEL [K-Electric Limited] and allows the actual/prudent cost relating to the interim operation of Unit-3 of BQPS-I (from May 1, 2021, to August 15, 2021). Accordingly, the earlier decisions of the Authority (dated September 15, 2021, and May 12, 2022) in this regard stand modified to this extent,” stated the power regulator. 

    However, a member of the authority, Mathar Niaz Rana, expressed in an additional note that under the Multi-Year Tariff (MYT) plan, KE was obligated to have both phases of BQPS-III operational by December 2019, a deadline they failed to meet. 

    Consequently, they resorted to utilising Unit 3 of BQPS-I, resulting in additional fuel expenses. The cost stemming from this inefficiency should not be passed on to consumers. 

    Nepra conducted a public hearing on January 25, 2023, during which KE was given an opportunity to present its case. 

    According to The News, in the hearing, the utility company asserted that they chose to temporarily utilise Unit-3 of BQPS-1 to meet Karachi’s peak summer demand instead of resorting to more costly power generation methods or implementing power outages, all in the best interest of consumers, as per Nepra Act Sections 31(2) and 32(3). 

  • Power company in Punjab wants to set power price at record-breaking high of Rs77.3 per unit

    Power company in Punjab wants to set power price at record-breaking high of Rs77.3 per unit

    In a noteworthy development that has captured significant attention and ignited considerable debate, the Kot Addu Power Company (KAPCO) has formally submitted an application to the National Electric Power Regulatory Authority (NEPRA) for the endorsement of what could potentially become the nation’s most costly electricity generation tariff. 

    This significant step has unfolded against the backdrop of ongoing deliberations concerning the escalating expenses associated with electricity production within Pakistan. 

    The Kot Addu Power Company has put forth a bold proposition, aiming to establish the electricity tariff at an unprecedented Rs77.31 per unit, attributing the primary rationale for this request to substantial hikes in production costs. 

    Notably, the present initial tariff offered by the independent power producer (IPP) company stands at a modest twenty-eight rupees per unit, underscoring the magnitude of the escalation should their proposal garner approval. 

    Adding a layer of complexity to this unfolding narrative, IPP Kot Addu Power, the entity responsible for electricity generation, has been granted a sixteen-month extension during the tenure of the Pakistan Tehreek-e-Insaf (PTI) administration.  

    However, this extension has not been without its share of controversy, with the Senate Power Committee recently deeming it unlawful, further intensifying the discourse surrounding this matter. 

  • OGRA proposes Rs10 million fine for oil companies involved in illegal petroleum stocking and distribution

    OGRA proposes Rs10 million fine for oil companies involved in illegal petroleum stocking and distribution

    The Oil and Gas Regulatory Authority (OGRA) has recommended severe penalties for those involved in the illegal storage, handling, and distribution of petroleum products in Pakistan. OGRA has proposed amendments to Sections 285-B and 285-C of the Pakistan Penal Code to address this issue.

    According to OGRA’s proposal to the Cabinet Division, individuals or oil marketing companies found guilty of unauthorised storage and handling of petroleum for the purpose of sale, resale, transport, or distribution to consumers could face up to ten years in prison or a fine of up to Rs10 million. The regulatory body emphasises that such unauthorised activities have detrimental effects on society, particularly innocent individuals who may unknowingly be exposed to unsafe petroleum products.

    The proposed amendments aim to address the existing gaps in the legal framework related to the handling of explosive substances, fire or combustible materials, and machinery that can cause harm to human life and property damage. While Sections 285, 286, and 287 of the Pakistan Penal Code already deal with these issues, they do not specifically cover the illicit sale, distribution, production, storage, or handling of petroleum products.

    To rectify this, OGRA has recommended the insertion of Section-A 285-B and 285-C in the Pakistan Penal Code. These new sections would serve to safeguard human life and property by imposing strict penalties for unlicensed handling of petroleum products and explosive substances, as well as unauthorised manufacturing of machinery and equipment.

    The proposed amendments align with the constitutional provisions of Pakistan, which ensure that no person shall be deprived of life, liberty, or property except in accordance with the law. By introducing these new measures, OGRA aims to deter illegal activities in the oil and gas sector, protect public safety, and maintain a regulated and lawful environment for the industry.

    The recommendations made by OGRA are now under consideration by the Cabinet Division. If approved and implemented, the proposed amendments would serve as a strong deterrent against the illegal handling and distribution of petroleum products, ensuring the safety and well-being of the Pakistani public.