ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday directed all distribution companies of the Water and Power Development Authority (Wapda) to refund Rs1.96 per unit to consumers this month, after overcharging them in April.

According to a notification, the regulator did not accept a petition by the Central Power Purchasing Agency (CPPA) that had sought a slash of Rs1.75 per unit to adjust for lower fuel prices, than had been estimated, in April. The regulator noted that the actual pool fuel charge for the month of April was Rs5.78 per unit against the reference fuel cost component of Rs7.63 per unit. The refund amount was calculated to be Rs1.96 per unit after adding a couple of other heads.

The CPPA had tried to add fuel cost to hydropower generation despite it being a renewable source of energy. However, the Nepra ruled that the law only allowed adjustment to the approved tariff under the head of fuel charges, while the Indus River System Authority charges, the net hydel profit and water use charges, claimed by the CPPA, did “not fall under the definition of fuel charges”. Such charges were a part of the regular tariff included in the Wapda’s annual revenue requirements.

The actual fuel charge for April was worked out at Rs5.665 per unit, compared to the pre-approved reference fuel charge component of Rs7.63 per unit, necessitating a refund of Rs1.96 per unit.

The tariff adjustment was allowed under a monthly fuel adjustment plan that required the transfer of actual fuel cost of power generation to consumers. The change in electricity rates would not be applicable to agricultural consumers and residential consumers using less than 300 units per month and K-Electric.

Published in Dawn, June 2nd, 2017