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Power firms seek tariff hike to adjust Rs202bn

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Nepra conducts public hearing for CPPA to voice its demands. — AFP/File
Nepra conducts public hearing for CPPA to voice its demands. — AFP/File

ISLAMABAD: The Central Power Purchasing Agency (CPPA) on Wednesday demanded an additional revenue adjustment of Rs202 billion, involving about Rs2.50 per unit increase in uniform electricity tariff for all distribution companies (Discos) during this fiscal year.

A three-member bench of the National Electric Power Regulatory Authority (Nepra) that conducted the public hearing reserved its judgment after listening to the viewpoint of CPPA and representatives of Discos. The bench indicated that it would like to settle the matter very soon so as to provide a clear financial picture of the power sector and also an opportunity to the government to decide how it wants to extended subsidy with allocation in the upcoming federal budget.

The public hearing was presided over by Nepra’s Vice Chairman Rehmatullah Baloch and comprising members Saif Ullah Chatha and Rafique Ahmed Shaikh. The CPPA presented its tariff increase case on behalf of 10 Discos due to variation in power purchase price for two quarters — July-September and October-December of 2018.

Out of Rs202bn cumulative additional requirement, a major portion of Rs166bn was on account of capacity purchase price, while remaining factors related to advance tax, variable and fixed operation and maintenance cost and the impact of extra or less than targeted purchases.

According to separate petitions, Islamabad Electric Supply Com­pany (Iesco) has sought adjustment of Rs25.526bn in two quarters of 2018, Lesco required an increase of Rs34.04bn, Gepco Rs15.866bn, Fesco Rs39.5bn, Mepco Rs35.7bn, Pesco Rs31.1bn, Hesco Rs5.6bn, Qesco Rs8.44bn, Sepco Rs5.11bn and Tesco Rs985 million.

CPPA Chief Executive Officer Abid Lodhi argued that Nepra should consider issuing the notification of quarterly adjustment on the pattern of monthly Fuel Cost Adjustment (FCA) mechanism. He said the tariff references should also be changed through a separate hearing for 2019-20 to make it benchmark.

On a question from Chatha, Lodhi said the revised mechanism would remain within the ambit of regulatory mechanism. He said the proposed mechanism would not have any issue in terms of consumer impact but if the regulator considered it terms of schedule of tariff for all companies then it would be counter-productive be­­cause notification of uniform tariff would lead to complications since existing reference tariff was based on Disco’s actual invoices to Nepra.

Published in Dawn, March 14th, 2019