Tariff hike for power distribution firms okayed

Updated 25 Sep 2020

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A spokesperson for Nepra said the regulators’ new rate would become effective after a notification to be issued by the federal government. — AFP/File
A spokesperson for Nepra said the regulators’ new rate would become effective after a notification to be issued by the federal government. — AFP/File

ISLAMABAD: The Nati­onal Electric Power Regu­latory Authority (Nepra) on Thursday allowed the distribution companies — except K-Electric — an increase of Rs1.62 per unit in its tariff to formalise a collection of about Rs165 billion on account of two quarterly adjustments.

A spokesperson for Nepra said the regulators’ new rate would become effective after a notification to be issued by the federal government but “the existing consumer-end rate will be maintained to a greater extent”.

He explained that the government was currently charging on an average about Rs1.56 per unit surcharge from consumers on account of five previous quarters — from July 2018 to September 2019 — due to capacity and additional capacity payments because of induction of fresh plants, use of system charges of NTDC and system losses which would expire on Sept 30.

This will be replaced by the average tariff adjustment of Rs1.62 per unit for two quarters of 2019-20 (September to March). In other words, the consumers have now been deprived of a reduction in average tariff that was due to them on expiry of the surcharge in September.

In its order Nepra said it has determined a uniform rate of Rs1.6236/kWh with the instant decision for the allowed amount of quarterly adjustments of Rs73.06bn, pertaining to the second quarter, and Rs91.8bn for the third quarter of FY 2019-20 (a total of Rs164.87bn), across each category of consumers.

The order said the ex-Wapda Discos had filed their adjustment requests on account of variation in PPP, including impact of system losses, for the second and third quarters of 2019-20 and requested approval for transfer of Rs162.36bn to consumers.

The Ministry of Energy (Power Division), in the meantime, filed a consolidated quarterly adjustment request on behalf of all the Discos by attaching with it individual quarterly adjustment requests for both the quarters.

The ministry requested that the impact of second and third quarters of FY 2019-20, on uniform basis, might immediately be reflected in monthly bills of consumers of all ex-Wapda Discos till its final recovery and any excess/less adjustment would be settled between Discos and CPPA-G, the order said.

The authority has determined a uniform rate of Rs1.6236/kWh for the allowed amount of quarterly adjustments of Rs73,065m pertaining to the second quarter and Rs91,805m for the third quarter of FY 2019-20 (total Rs164,870m), across each category of consumers of ex-Wapda Discos, based on projected sales for the FY 2017-18, after excluding the sales to lifeline consumers, to be recovered in twelve months, starting from the date of its notification, the Nepra said.

Published in Dawn, September 25th, 2020