NEPRA fines CPPA, NTDC Rs60m over costly electricity generation

The National Electric Power Regulatory Authority (NEPRA) has imposed a total fine of Rs60 million on the Central Power Purchasing Agency and the National Transmission and Despatch Company.

The action relates to abnormal increases in fuel costs and system inefficiencies in January 2024. According to NEPRA, the fuel cost benchmark for that month was set at Rs7.49 per unit, but the actual cost rose to Rs14.60 per unit.

The Central Power Purchasing Agency (CPPA) had sought an increase of Rs7.13 per unit under fuel price adjustment, prompting the authority to order an investigation.

The inquiry revealed that despite the availability of cheaper power generation sources, expensive electricity was produced using furnace oil and diesel.

NEPRA stated that output from LNG and nuclear power plants was reduced, while reliance on diesel and furnace oil resulted in costly generation worth Rs31.23 billion.

The regulator fined CPPA Rs10 million for failing to satisfy the authority, while NTDC was fined Rs50 million for not improving the transmission system.

The fine on NTDC was linked to its failure to upgrade transmission infrastructure, which prevented cheaper electricity generated from local coal from being supplied to northern regions.

The NEPRA has directed both entities to deposit the fines within 15 days.