ISLAMABAD, June 19: Around 17 interveners would oppose here on Thursday a Water and Power Development Authority (Wapda) petition seeking an 88 paisa per unit across-the-board increase in power tariff when the National Electric Power Regulatory Authority (Nepra) starts a three-day public hearing.
Various interest groups belonging to industrial and commercial consumers are opposing the tariff increase on legal, social and economic grounds as Wapda seeks to meet a net financing gap of Rs55 billion during fiscal 2002-03 through across-the-board tariff increase for all consumer groups like industrial, commercial, agriculture and domestic. Wapda wants to meet another fiscal gap of Rs10 billion through non-tariff measures.
The harshest criticism would come from the general public and the consumers groups like senior citizens, consumers rights and farmers associations because this is for the first time in a decade that tariff for lifeline consumers has been proposed to be increased from Rs1.40 per unit to Rs2.28 per unit.
Wapda claimed in its petition that its earlier request was rejected by Nepra but as per agreement reached in a meeting held in the Chief Executive Secretariat on March 22, 2002, additional information with documentation was submitted to Nepra.
Justice (retired) Saad Saud Jan would preside over the public hearing.
Public interveners include the Qadir Agro Industries, Roomi Cotton Factory, Pakistan Cotton Ginners Association, Multan Chamber of Commerce and Industry, Farmers Association of Pakistan, Senior Citizens of Pakistan, Pakistan Steel Melters Association, All Pakistan Textile Mills Association, Consumers Rights Commission, EME-Cooperative Society of Pakistan, Liberal Forum, Ittehad Chemicals, Sitara Chemicals, ICI-Pakistan and individuals from the general public.
Nepra experts would be primarily concentrating on three aspects to challenge Wapda tariff demands, including the utility’s failure to meet line loss reduction target agreed last year, failure in meeting the sales target by 3 per cent and an uneconomical load purchase schedule with the independent power producers.
The total energy losses of the utility were projected at 23.1 per cent when tariff was increased last year but these losses are still hovering around 24.6 per cent as per Wapda figures.
This alone translates into Rs60 billion annual as one per cent change in tariff amounts to Rs2.4 billion revenue. Wapda wants to fix 23.1 per cent loss target to be achieved by the end of next fiscal year.
Receivables of the utility are estimated at 16 per cent or around Rs33 billion. Around 15 per cent increase in operation and management cost has been projected this year and another 10 per cent next year. A 5 per cent currency fluctuation over the next year has also been envisaged.
While energy purchase price from IPPs has been estimated to decrease from Rs44 billion in fiscal 2002 to Rs36 billion in 2003, the capacity payments are projected to increase from Rs62 billion in 2002 to Rs65 billion in 2003.
Wapda claims that it had originally projected to enhance energy sale by 6 per cent but results for eight months suggest that the target was not achievable and should be brought down to 4 per cent. It, however, fails to explain how the sale would increase with 35 per cent increase in tariff.
Wapda’s most impressive logic relates to the imposition of 3.15 per unit tariff rate for purchase of energy from Chashma Power Plant by the federal government against the original rate of Rs1.75 per unit.
