Power Consumers Charged Additional Rs. 97 Billion in FY22

The end power consumers have been burdened with an additional approximately  Rs. 97 billion on account of the operation of Combined Cycle Power Plants (CCPP) in open cycle mode and PLAC Part Load Adjustment Charges (PLAC) during the fiscal year 2021-22 (FY22).

The operation of Combined Cycle Power Plants (CCPP) in open cycle mode affects the consumer-end tariff adversely, said NEPRA State of the Industry Report 2021-22.

Generally, the tariff of CCPP while operating in the open cycle is 1.5 times higher, said the report. During FY22, it is noted that the dedicated cheap price local gas based CCPP Guddu was either not operated or operated in open cycle mode. Besides the old power plants of Guddu, the newly commissioned Guddu 747 MW Power Plant during FY22 was operated with only one gas turbine.

The loss of generation due to the operation of CCPP Guddu in the open cycle had to be met by operating the costliest power plants. Based on marginal fuel prices, the financial loss due to the non-availability of units at TPS Guddu (old and 747 MW) was calculated as more than Rs. 55 billion during FY22.

The operational performance of the Guddu Power Plant is extremely poor for the last many years continuously affecting the power sector and the electricity consumers negatively. The Authority has already initiated proceedings against the licensee.

Similarly, operating Power Plants at lower efficiencies and payment of part load adjustment charges have affected the power consumers.

The operation of the Thermal Power Plants on part load results in a loss of efficiency of the power plants and thus higher fuel price charges for end-consumers. Under Power Purchase Agreement (PPA), the power plants are usually allowed to claim Part Load Adjustment Charges (PLAC) when they are operated on part load by the System Operator.

Like previous years, during FY22, it is noted that the most efficient RLNG-based power plants in CPPA-G System (above 61 and 51 percent efficiency) were also operated on part load despite having demand in the system. During the year, an amount of Rs. 41.7 billion accrued on account of PLAC. With better planning, specifically with better management of AT&C losses-based load shedding in the country, this undesirable expense could have been minimized, if not fully eliminated, the report said.