ISLAMABAD: The fuel-based electricity tariffs for distribution companies (Disco) of ex-Wapda are estimated to go up for a month owing to adverse energy mix and rising international oil prices after almost three years of continuous decline.

The ex-Wapda Discos, through Central Power Purchasing Agency (CPPA), have formally sought a 44 paisa per unit increase in monthly tariff for next month on account of higher actual fuel cost in March than estimated by the authorities. The regulator is expected to hold a public hearing on the matter on April 24.

Under the practice in vogue, the distribution companies have been charging significantly higher estimated fuel charge to power consumers and later claim adjustment against actual cost in a subsequent month with the approval of the power regulator. The practice has been helping power companies generate billions of rupees as windfall from consumers in advance to have better cash flows without financing costs.

The practice is now posing fresh challenge to the power companies in view of rising international oil prices and may require the Discos to incur higher costs and claim recovery in a subsequent month.

In its petition, the CPPA reported to the regulator that it had charged a lower reference tariff of Rs6.643 per unit to consumers in the month of March but actual fuel cost turned out to be Rs7.1 per unit. Therefore, the power companies should be allowed to recover about 44 paisa per unit from consumers.

The petitioner said about 8,740 Gwh (Gigawatt hours) were generated in March and 8,469 Gwh could be delivered to distribution companies due to about 3pc losses in the transmission system.

The CPPA said the hydropower generation contributed only 10pc of total electricity generated in March because of adverse hydrological conditions and low irrigation indents by the provinces. The hydropower has a zero fuel cost. Also, the wind and solar plants together contributed about 2.5pc energy at no fuel cost.

Published in Dawn, April 19th, 2018