ISLAMABAD: The power tariff for all ex-Wapda distribution companies is estimated to increase by almost Rs2 on average in a few days with a revenue impact of about Rs140 billion during the current year.

The National Electric Power Regulatory Authority (Nepra) on Tuesday concluded a suo moto public hearing for increasing Rs1.50 per unit electricity tariff to yield Rs115.179bn to 10 distribution companies of former Wapda and reserved a decision pending exchange of data with an intervener.

It has already allowed a 48 paisa per unit increase in the average tariff a few months ago with a financial impact of Rs24.34bn for write offs of defaulted bills by consumers without approval of respective board of directors of the distribution companies. The government is expected to notify both increases shortly.

The public hearing was informed on Tuesday that major chunk of the amount worth Rs59bn will be paid to the provinces on account Net Hydel Profit (NHP) during the current year, followed by Rs49bn on account of less recoveries and about Rs54.6bn against prior year adjustments.

Against this, an amount of Rs39bn would be adjusted against over-recoveries from consumers through retention of monthly fuel adjustments, leaving an increase of Rs115bn.

The regulator has been resisting the government desire for a Rs225bn additional revenue through tariff increases on legal grounds saying its prior year determinations had not been notified by the government.

Continuous litigation and backdoor negotiations between Nepra and the power ministry officials led to the conclusion that the regulator should start suo moto hearings on NHP, prior year adjustments and fewer recoveries on a fast track basis to avoid a lengthy normal procedure involving tariff petitions by Discos.

The public hearing, presided over by Nepra Chairman Brig (retd) Tariq Sadozai and all the four provincial members, was told by the regulator’s case officers that Rs19bn NHP was payable by the distribution companies for financial year 2016-17 and another Rs40bn as arrears.

After accounting for prior year adjustments etc under various heads, the tariff for various Discos will need to be increased in a range of Rs3.38 to 13 paisa per unit or an average or Rs1.50 per unit because of a uniform rate.

As such, the average tariff for Discos was estimated at about Rs12.90 per unit. Originally Nepra determined the average tariff at Rs10.90 per unit for 2015-16 which was hiked up to Rs11.38 per unit a few days ago and was considering to take it up to Rs12.90 per unit, with a cumulative impact of about 18.5pc.

The regulator said it considered determination of power purchase price on account of capacity payments and prior year adjustments.

Published in Dawn, October 11th, 2017