ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday determined a net cumulative increase of about Rs6.40 per unit in K-Electric tariff under quarterly adjustment (QTA) for the period between April 2021 and March 2022.

The tariff increase would, however, not affect the consumers as it would form part of the tariff differential subsidy (TDS) to be paid by the government out of budget because of the national uniform tariff, a Nepra spokesperson explained.

In its two separate tariff determinations sent to the federal government, the regulator worked out tariff reductions for two quarters of July-Septe­mber 2021 and January-March 2022 at the rate of 95 paise and 47 paise per unit, respectively. Sepa­ra­tely, it allowed a tariff increase of Rs1.33 per unit and Rs6.49 per unit for two quarters of April-June 2021 and October-December 2021, respectively.

As per the mechanism provided in the determination, the impact of change in KE’s fuel cost component due to variation in fuel prices, generation mix and volume is passed on to the consumers directly in their monthly bills in the form of Fuel Charges Adjustment (FCA).

Similarly, the impact of change in the fuel component of Power Purchase Price (PPP) due to variation in fuel prices and the energy mix is passed on to the consumers through monthly FCA.

However, the impact of monthly variations in K-Electric’s own generation’s fuel cost component as well power purchase price to the extent of targeted T&D losses, not taken into account in the monthly FCAs, is adjusted every quarter. In addition, the monthly variations in the variable O&M and fixed costs of the PPP, as allowed by the regulator, are also adjusted every quarter.

The impact of these variations is worked out based on expected units to be sold in the next quarter and to be adjusted in the schedule of tariff.

Published in Dawn, June 10th, 2022