ISLAMABAD: The government on Tuesday increased electricity tariff by 53 paisa per unit for all distribution companies of Wapda (Water and Power Development Authority) to generate about Rs53 billion additional revenue over a period of one year.

According to a notification issued by the Power Division, the increased electricity rates are effective from Oct 1 and will remain in place until Sept 30 next year. The increase in tariff would not be applicable to consumers using less than 300 units per month and to consumers of K-Electric.

The notification said an increase of about 33 paisa per unit was necessitated on account of two quarterly adjustments for distribution companies and about 20 paisa per unit on account of distribution margin, making a total increase of 53 paisa per unit. It said the increase in tariff had been determined by the National Electric Power Regulatory Authority.

New rates will remain in place until Sept 30 next year; govt to generate about Rs53bn additional revenue

In its interim determination last week, the regulator said it took “pragmatic considerations” in allowing quarterly adjustment and changes to distribution margin on provisional basis and would decide multiple requests of the Ministry of Energy, Central Power Purchase Agency and distribution companies on 93 paisa per unit increase in due course.

The regulator had determined a uniform rate of Rs0.3324 per kWh for the allowed amount of quarterly adjustment of Rs33.75bn across each category of consumers of XWDISCOs, to be recovered in 12 months period, based on projected sales for the FY2017-18, after excluding life line consumers.

The regulator noted that keeping in view submissions of the Ministry of Energy the distribution companies under single year tariff regime would require some time to file their tariff petitions in line with the amended Act. However, “being cognisant of the financial constraints of the Power Sector (Nepra) has decided to allow an increase of Rs14 billion, in the already notified tariff, strictly on provisional/interim basis subject to its adjustment once the tariff determinations of the XWDISCOs under Single Year Tariff Regime was finalised”.

The regulator also confirmed that three Discos had filed their annual adjustment for fiscal year 2019-20 that had “not been substantiated with the required documentary evidence e.g. details of write-offs, audited financial statements etc”. Yet keeping in view the financial constraints of the Power Sector, and the submission of the Ministry of Energy, the regulator has decided to allow the increase of Rs5.772 billion in the already notified tariff of these distribution companies, strictly on interim/provisional basis, subject to its adjustment based on the required information, which is not available at this point in time”.

The regulator also conceded that it was making a departure from its own judgements to allow these tariff increases. It said the regulator “in its uniform tariff determination dated December 19, 2018 had categorically held that although the petition filed by the Federal Government fell short of the legal requirements” but in view of “pragmatic considerations, it would be inequitable and unconscionable for the Authority to dismiss the uniform tariff motion on the basis of non exhaustive compliance of the procedural elements thereof”.

Pemra also put on record that its directives under previous tariff adjustments had not been complied by the government or by the power companies.

However, considering that the instant matter was merely an interim/provisional amount being allowed in the already approved uniform tariff by the Authority, therefore, without prejudice to the said observations and directions, the amounts have been determined in a uniform manner. The instant determination shall not in any way operate to modify, alter, rescind or waive of the observations and the directives of the regulator issued in December last year.

Published in Dawn, October 2nd, 2019