The National Electric Power Regulatory Authority (Nepra) has called for a comprehensive study to align the Time of Use (ToU) tariff with evolving electricity demand patterns. This directive came during a public hearing on a petition by state-owned power distribution companies (DISCOs) regarding a Fuel Adjustment Charge (FAC) refund of Rs0.63 per unit for November 2024.
Key Highlights from the Public Hearing
Shifting Demand and Partial Load Issues
- Nepra Chairman Waseem Mukhtar highlighted the need for a detailed analysis of demand shifts, citing significant FAC refunds requested in recent years.
- Rs47 billion (2023)
- Rs56 billion (2024)
- Rs2.2 billion (November 2024)
Delayed Infrastructure Projects
- 500kV Lahore (North) Grid Station:
- Original deadline: August 2024
- Revised timeline: April 2025
- Nepra ordered an inquiry into the delays, emphasizing the grid station’s importance for decongesting the network and boosting reliability in Lahore and Gujranwala regions.
- Matiari-Lahore HVDC Line Utilization:
- November 2024 average loading: 800 MW (20% of 4,000 MW capacity)
- Expected increase: 300 MW with Lahore North grid completion.
Challenges with Local Coal and Power Costs
- Concerns over the underutilization of local coal mines prompted Nepra to urge government intervention, particularly in resolving disputes such as the one between Lucky Cement and Pakistan Railways.
- Stakeholders raised issues regarding the higher costs of local coal compared to imported alternatives, complicating efforts to provide affordable electricity.
Planning and Circular Debt
- Load Pattern Adjustments:
Nepra criticized NTDC for insufficient planning and lack of investigation into changing load patterns. The government is expected to address these issues in the upcoming base tariff petition early next year. - Circular Debt Crisis:
- Current circular debt: Rs2.38 trillion
- Payables to Independent Power Producers (IPPs): Rs1.6 trillion
Electricity Generation and Sales
- November 2024 Highlights:
- Units generated: 7.22 billion
- Sales increase: 6.34% compared to November 2023.
- Increased reliance on local and imported coal.
- 500 MW additional supply to K-Electric for improved efficiency in coal plant operations.
- Winter Package Uptake:
- 838,000 consumers benefited, with an additional 45 million units consumed.
- Breakdown:
- Residential: 342,208
- Industrial: 28,431
- Commercial: 467,416
Conclusion
Nepra’s focus on aligning tariffs with dynamic demand patterns, addressing infrastructure delays, and ensuring affordable electricity highlights the regulator’s proactive approach to mitigating systemic inefficiencies in Pakistan’s energy sector. While progress is evident in generation and sales, unresolved issues like circular debt and local coal utilization remain critical challenges for the power sector.
