ISLAMABAD, March 5: The Water and Power Development Authority has sought more than 500 per cent increase in hydel power tariff with immediate effect, officials said on Friday.

Sources said that Wapda had filed a formal petition before the National Electric Power Regulatory Authority to fix a revised tariff for supply of hydroelectric power by Wapda to the National Transmission and Dispatch Company.

The Wapda has demanded a tariff of Rs1.169 per unit (Kwh) which is five to six times higher than the prevailing average tariff for hydel power plants. The cost of hydel power production is below 13 paisa per unit at Mangla and Tarbela power stations while it comes to 58 paisa per unit at the newly-built Ghazi Barotha Hydropower Project.

Moreover, Wapda also demanded the entire tariff in the form of capacity price at Rs525 per kilowatt, which would cost NTDC about Rs22 billion per month. Currently, the ratio of thermal-hydel power mix is around 28:72.

Sources at the ministry of water and power confirmed that Wapda has been asked to withdraw the petition as the government was currently examining various options to reduce overall power tariff on the recommendations of the task force on electricity tariff.

These sources said Mirza Hamid Hassan, head of the task force, had advised the government that proposed increase in tariff would put "an unjustifiable burden on the consumers" at a time attempts were being made for tariff reduction.

"The proposed tariff arrangement is absolutely undesirable and highly detrimental to consumer interest as it would take away the advantage of cheap hydel power and raise the average tariff considerably", a senior official quoted the task force chairman as writing to the government.

Sources said that if the concept of capacity payment is introduced, consumers will have to pay for the total capacity for the whole year while very little hydel power would be actually available during winter months when water availability is low.

Under the donor-funded power sector restructuring plan currently in the process of being implemented, the NTDC would be required to pay separate tariffs to generation companies for the purchase of electricity and then it would charge an average tariff to the distribution companies.

All generation companies, NTDC and distribution companies have filed their tariff petitions before the Nepra which awaits a policy decision from the federal government to announce their separate tariffs.

The Nepra was required under the world bank deadline to announce its determinations on these petitions latest by Dec 31, 2003 but could not meet its target.