The National Electric Power Regulatory Authority (NEPRA) has levied a combined penalty of Rs60 million on the Central Power Purchasing Agency (CPPA) and the National Transmission and Despatch Company (NTDC) due to excessive electricity generation costs and operational inefficiencies observed in January 2024.
In a significant development, NEPRA highlighted that the fuel cost benchmark for the month was Rs7.49 per unit, whereas the actual fuel cost escalated sharply to Rs14.60 per unit. The CPPA had requested an increase of Rs7.13 per unit under the fuel price adjustment mechanism, which triggered NEPRA to initiate a detailed investigation.
The inquiry uncovered that despite the availability of more economical power sources, electricity generation heavily relied on costly furnace oil and diesel. Notably, output from LNG and nuclear power plants was curtailed, while dependence on diesel and furnace oil led to expensive generation costs amounting to Rs31.23 billion.
NEPRA penalized CPPA Rs10 million for failing to provide satisfactory explanations for the surge in fuel costs. Meanwhile, NTDC was fined Rs50 million due to its inability to upgrade the transmission infrastructure, which hindered the distribution of cheaper electricity produced from local coal to northern regions.
The regulator has instructed both CPPA and NTDC to remit the fines within 15 days, emphasizing the need for improved efficiency in power generation and transmission to control costs and ensure affordable electricity supply.
