Islamabad, 28 October 2024: Big differences were revealed among the Members of National Electric Power Regulatory Authority (NEPRA) over the tariff of bagasse-fired power plants.
The matter related to tariff of bagasse-fired power plant was discussed during decision of determination of FCA for the month of August 2024.
The differences were revealed among the members of the authority when Member (Tariff) Mather Niaz Rana raised serious questions on the formula of determination of tariff of Bagasse.
The Member (Tariff) and other NEPRA’s members including the Chairman Waseem Mukhtar have written separate additional notes on the tariff of bagasse-fired power plants.
In the additional note, Mathar Niaz Rana, has said that there was criticism on the bagasse-based tariff. The bagasse tariff has been deemed excessively high and decided without adequate consumer participation.
He claimed that the issue of tariff of bagasse required an urgent attention as it has been surpassed to the local coal prices. The Central Power Purchasing Agency) (CPPA-G highlighted the impact during the public hearings on the FCA.
The data showing a significant increase in the bagasse tariff from June to August 2024 as compared to local coal. In June and July, 2024, the bagasse tariff reached at Rs5.982 per kWh, but sharply rose to Rs12.48 per kWh in August 2024.
The prices of local coal were increased from Rs11.03/unit in June 2024 to Rs11.33 in July 2024, and Rs12.27 in August 2024. By August 2024, the bgasse tariff was not only risen significantly but also surpassed the local coal tariff. The sudden increase in the bagasse tariff has raised consumers’ concerns.
Mr Khan suggested that the negative FCA of Rs1.2628 per unit should be notified excluding bagasse fired power plants. He also said that the authority take corrective action regarding its decision and promptly initiate suo moto curative proceedings under the applicable legal provisions of the NEPRA Act.
Mr. Khan stressed that there is necessary to hold public hearing to transparently and thoroughly assess the bagasse-based tariff., explore pricing alternatives, and address related controversies.
Chairman and other Authority members responded to the Member Tariff and said that defend the tariff of bagasse.
They said that the comparison of prices of coal and bagasse by the Member Tariff is misleading and lacks critical context.
The fuel cost of bagasse power plants had been under adjudication since 2019 across various legal forums. The comparison of the provisional component of 2015 with the revised component of 2024 is out of place, they said.