News

Another jolt awaits power consumers as Discos seek Rs2.07 hike for July

Published

1 month ago

August 23, 2023

ISLAMABAD: Despite a 26pc increase in base uniform national tariff with effect from July 1, there appears to be no respite in sight for power consumers as ex-Wapda distribution companies (Discos) have sought permission to extract almost Rs30 billion more from their subscribers next month.

Through their commercial agent — the Central Power Purchasing Agency (CPPA) — the discos have filed a joint petition with the National Electric Power Regulatory Authority (Nepra) for an additional fuel cost adjustment (FCA) of Rs2.07 per unit in the billing month of September for electricity consumed in July.

The Nepra has accepted the petition and has called public hearings on Aug 30 to see if the proposed increase in tariff is justified in line with monthly FCA mechanisms and if merit was following in utilising power generating units in July.

Once approved, the Discos would charge an additional amount of about Rs29.8bn from their consumers for electricity consumed in July at an additional FCA of about Rs2.07 per unit despite almost 64pc power generation from domestic cheaper fuel that was higher than 58pc in June, 56pc in May and 54pc in April.

The increase is FCA is despite the fact that base average tariff has gone up by more than Rs7.5 per unit last month. The additional cost is also despite the fact the country’s hydropower plants made the healthiest contribution of over 37pc to overall national power grid in July against 26.96pc in June.

Hydropower has no fuel cost

The LNG-based power generation at 19.67pc slightly improved in July when compared to 18.55pc in June but was down lower that its 24.33pc share in May. LNG based power generation, nevertheless, maintained its second position after hydropower. The third largest share came from coal-based generation at 14.69pc in July, down from its 17.75pc share in June. The nuclear generation slightly improved to 14.2pc in July against 13.54pc in June and 12.6pc in May but was still way behind its 19pc in April and 24.28pc in February.

Power supply from domestic gas continued its downward journey and contributed just 7.61pc to the national grid in July against 8.54pc in June, 10.35pc in May and 12pc in April.

The fuel cost of furnace oil based power generation increased to 28.7 per unit in July against Rs26.1 per unit in June and Rs23.24 per unit in May. The LNG based power generation cost in July slightly increased to Rs24.43 per unit against Rs24.07 in June. Furnace oil-based generation in July was contained at 2pc in the overall basket when compared to 5.4pc in June.

Higher actual cost

The CPPA claimed on behalf of Discos that the consumers were charged a reference fuel cost of Rs6.89 per unit in July, but the actual cost turned out to be Rs8.96 per unit, hence an additional charge of Rs2.07 per unit should be allowed.

The cost of power generation from domestic gas increased to Rs13.7pc unit in July when compared to Rs11.74 per unit in June because of increase in gas prices notified by the government.

Coal-based power generation cost, on the other hand, dropped to Rs11.54 per unit in July against Rs14.05 per unit in June.

Three renewable energy sources — wind, bagasse and solar — together contributed about 4.5pc share to the national grid in July, down from its 5.6pc share in June and 6.6pc May. Wind and solar have no fuel cost, while the cost of bagasse-based generation remained unchanged at about Rs6 per unit.

After approval by the Nepra, the increase in FCAs would be adjusted in consumers’ bills in the upcoming billing month of September. The FCA is reviewed every month as per the tariff regime applicable across the country and is usually applicable to the consumer’s bills for one month only.

The higher FCA, on approval, would be applicable to all consumer categories except lifeline power consumers and protected domestic consumers consuming up to 300 units, and agricultural consumers and electric vehicle charging stations (EVCS). The adjustment on account of monthly FCA is also applicable to the domestic consumers having Time of Use (ToU) meters irrespective of their consumption level.

Under the tariff mechanism, changes in fuel cost are passed on to consumers only on monthly basis through automatic mechanism while quarterly tariff adjustments on account of variation in power purchase price, capacity charges, variable operation and maintenance costs, use of system charges and including impact of transmission and distribution losses are built in the base tariff by the federal government.

Published in Dawn, August 23th, 2023

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News

Trump business empire under threat as New York fraud trial opens

Published

5 mins ago

October 2, 2023

callumbryne

Former US president Donald Trump will appear in a New York court on Monday as a civil fraud trial against him and two of his sons kicks off, with the case threatening the Republican’s business empire as he campaigns to retake the White House.

In Monday’s case, Judge Arthur Engoron has already ruled that Trump and his sons Eric and Don Jr committed fraud by inflating the value of the real estate and financial assets of the Trump Organization for years.

New York Attorney General Letitia James is now seeking $250 million in penalties and the removal of Trump and his sons from management of the family empire.

Trump said late Sunday he planned to be present for the start of the trial on Monday morning.

“I’m going to Court tomorrow morning to fight for my name and reputation,” the 77-year-old wrote on his Truth Social platform. “This whole case is a sham!!!”

In addition to this civil case, Trump also faces several major criminal proceedings in the months ahead.

He is scheduled to appear before a federal judge in Washington on March 4 on charges of trying to overthrow the results of the 2020 presidential election won by Joe Biden.

Trump will then be back in New York state court, this time on criminal hush money charges, and later in a Florida federal court, where he is accused of mishandling classified documents after leaving office.

Finally, he will also have to answer to state charges in Georgia, where prosecutors say Trump illegally tried to get the southern state’s 2020 election results changed in his favor.

In the New York civil case, Engoron ruled that Trump, his two eldest sons, and other Trump Organisation executives lied to tax collectors, lenders, and insurers for years in a scheme that exaggerated the value of their properties by $812 million to $2.2 billion between 2014 and 2021.

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As a result, the judge revoked the business licenses that allowed the Trump Organisation to operate some of its New York properties.

Actually enforcing such penalties would be “a major blow to Donald Trump’s ability to do business in the State of New York going forward,” Will Thomas, a professor of business law at the University of Michigan, told AFP.

Under that kind of pressure, Trump — who made his reputation and fortune as a real estate mogul in the 1980s and had promised to bring his cut-throat industry tactics to the Oval Office — could eventually lose control over many of his company’s flagship properties, such as his 5th Avenue Trump Tower in Manhattan.

According to Attorney General James, a Democrat, Trump’s own apartment in that building is among the spaces that were fraudulently overvalued — it was listed as three times bigger than its true size.

Another Manhattan building, at 40 Wall Street, was overvalued between $200-$300 million in financial disclosures, James alleges.

Trump’s luxury Mar-a-Lago resort in Florida — the site of the classified documents drama — and several other Trump Organisation golf clubs also appear in James’s complaint.

Trump has repeatedly dismissed the New York civil allegations, calling James, who is Black, “racist,” and labeling Engoron “deranged.”

On his Truth Social platform, Trump claimed there was no “wrongdoing” in his actions of “fully paying back sophisticated Wall Street Banks in full, with interest, with no defaults, and with no victims.”

There are likely to be dozens of witnesses called to testify at the trial, including Trump himself, and former financial director of the Trump Organisation Allen Weisselberg, who served time in prison after pleading guilty to tax fraud in a separate case brought against the business.

Trump’s children Eric, Don Jr, and his oldest daughter Ivanka — who was initially also targeted by James’s complaint but ultimately not prosecuted — are also likely to present their own testimony.

Trump’s former lawyer Michael Cohen — now an outspoken critic of the former president — and officials from certain Trump-linked financial institutions are also expected to appear.

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News

At least 38 injured in police station fire in Egypt’s Ismailia

Published

17 mins ago

October 2, 2023

callumbryne

A huge fire broke out at a police headquarters in the Egyptian city of Ismailia on Monday, injuring at least 38 people, according to local media.

No fatalities were immediately reported but the building is staffed by soldiers at all hours and hospitals were placed on alert.

Footage on local media showed smoke rising from the entirely blackened multi-storey building.

The cause of the blaze, which broke out at the headquarters of the Ismailia Security Directorate before dawn, is not yet known.

Of 26 wounded who were transferred to a local hospital, 24 had suffered from “asphyxiation” and two from burns, local media reported citing the health ministry.

Twelve more were treated at the scene.

The health ministry deployed 50 ambulances to the scene, which were joined by military emergency services including two planes, according to state media.

Deadly fires are a common hazard in Egypt, where fire codes are rarely enforced and emergency services are often slow to arrive.

In August 2022, a fire caused by a short circuit killed 41 worshippers in a Cairo church, prompting calls to improve the country’s infrastructure and the response time of the fire brigade.

In March 2021, at least 20 people died in a fire at a textile factory in the capital, while in 2020, two hospital fires killed 14 people.

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News

Annual inflation rises to 31.4pc amid high energy prices

Published

38 mins ago

October 2, 2023

callumbryne

Pakistan’s annual inflation rate rose to 31.4 per cent in September from 27.4pc in August, statistics bureau data showed on Monday, as the country reels from high fuel and energy prices.

The country is embarking on a tricky path to economic recovery under a caretaker government after a $3 billion loan programme approved by the International Monetary Fund (IMF) in July averted a sovereign debt default, but with conditions that complicated efforts to rein in inflation.

On a month-on-month basis, inflation climbed 2pc in September, compared to an increase of 1.7pc in August. Reforms required by the IMF bailout, including an easing of import restrictions and a demand that subsidies be removed, have already fuelled annual inflation, which rose to a record 38pc in May.

Food inflation remained elevated at 33.1pc with the year-on-year increase in non-perishable food items at 38.4pc and 4.37pc for perishable food items.

Annual consumer inflation in urban and rural areas increased to 29.7pc and 33.9pc year-on-year, respectively.

Meanwhile, the highest year-on-year increase was recorded in the categories of alcoholic beverages and tobacco (87.45pc), recreation and culture (58.77pc), furnishing and household equipment maintenance (39.32pc) and non-perishable food items.

Index-wise increase in inflation YoY (in descending order)

Alcoholic beverages and tobacco: 87.45pc
Recreation and culture: 58.77pc
Furnishing and household equipment maintenance: 39.32pc
Non-perishable food items: 38.41pc
Miscellaneous goods and services: 36.42pc
Restaurants and hotels: 34.3pc
Transport: 31.26pc
Housing and utilities: 29.7pc
Health: 25.28pc
Clothing and footwear: 20.55pc
Education: 11.12pc
Communication: 7.42pc
Perishable food items: 4.37pc

Interest rates have also risen to their highest at 22pc, and the rupee hit all-time lows in August before recovering in September to become the best performing currency following a clampdown by authorities on unregulated FX trade.

On Friday, the ministry of finance said in its monthly report that it anticipated inflation remaining high in the coming month, hovering around 29-31pc due to an upward adjustment in energy tariffs and a major increase in fuel prices.

The report added that inflation was, however, expected to ease, especially from the second half of the current fiscal year that starts on Jan 1.

On Saturday, the government cut petrol and diesel prices from a record high, after two consecutive hikes. The finance ministry cited international prices of petroleum products and the improvement in the exchange rate, following the clampdown on unregulated FX trade.

Inflation has been elevated, hovering in double digits, since November 2021.
The country targeted inflation at 21pc for the current fiscal year, but it averaged 29pc during the first quarter.

Worsening economic conditions, along with rising political tensions in the run-up to a national election scheduled for November, triggered sporadic protests in September, with many Pakistanis saying they are struggling to make ends meet.

Analysts said the inflation reading was in line with market expectations.

Tahir Abbas, head of research at Arif Habib Limited, a Karachi-based investment company, said inflation appeared to have peaked for the current fiscal year and would subsequently recede.

“The higher reading is mainly due to the low base effect which was also mentioned in the last monetary policy statement. Going forward, in the next few months, we expect inflation to ease to around 26-27pc,” said Fahad Rauf, head of research at Ismail Iqbal Securities, a Karachi-based brokerage firm.

Rauf said higher inflation statistics should not impact monetary policy.

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