Nepra reserves decision on tariff hike for Discos

Published March 31, 2021
Nepra Chairman Tauseef H. Farooqui said the fuel cost adjustment for February would be 63-65 paisa. — APP/File
Nepra Chairman Tauseef H. Farooqui said the fuel cost adjustment for February would be 63-65 paisa. — APP/File

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday reserved its judgment on increasing power tariff by 91 paisa per unit under quarterly adjustment and 66 paisa per unit on monthly fuel cost adjustment for 10 distribution companies of ex-Wapda.

Presiding over two separate public hearings, Nepra Chairman Tauseef H. Farooqui said the fuel cost adjustment for February would be 63-65 paisa and would be determined after verification of data provided by the Central Power Purchasing Agency (CPPA) and would be chargeable to consumers in the billing month of April.

In its first petition, the Central Power Purchasing Agency (CPPA) on behalf of all Discos had demanded about 66 paisa per unit increase on account of higher generation cost electricity consumed in February to generate about Rs4.7 billion in additional cash flows to power companies.

Separately, all the Discos have filed separate petitions for quarterly tariff adjustments for the period July 2020 to December 2020 (two quarters) with additional cumulative financial impact of Rs91bn that works out to be about 91 paisa per unit increase in base tariff.

This includes Rs44.89bn on account of first quarter and Rs46.76bn for second quarter. The tariff adjustments under QTAs would become part of the tariff separately under a schedule to be set jointly by the regulator and the government.

Under the tariff mechanism, changes in fuel cost are passed on to consumers on monthly basis through automatic mechanism while QTAs on account of variation in power purchase price (PPP), capacity charges, variable operation and maintenance costs, use of system charges and including impact of transmission and distribution losses are built in the base tariff by the federal government.

Officials said the quarterly adjustments may have to be kept pending for a couple of months given the upcoming impact of recent tariff increases. In all likelihood, the official explained, the government would like to replace the existing QTA with the July-December 2020 QTA in July.

Published in Dawn, March 31st, 2021

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