ISLAMABAD, Dec 3: The National Electric Power Regulatory Authority (Nepra) rejected on Friday the federal government's advice to reconsider its tariff determination for consumers of eight distribution companies of Wapda, it is learnt.

While rejecting the advice, Nepra asked the federal government to accept the tariff rates determined by it last month and notify the revised tariff schedule without any delay, a senior official of the power ministry told Dawn.

The federal government would now decide whether to provide a subsidy of Rs58 billion, Rs68 billion or Rs100 billion to minimize a gap between consumer tariffs of different companies.

Nepra in its two-line letter to the power ministry said its advice did not raise any new point and hence there was no tangible ground or justification for reconsidering the tariff determination, the official said.

"We have rejected power ministry's request and asked it to accept our judgment and notify it. So the matter stands settled here," said a Nepra official when asked for confirmation.

He explained that Nepra had clearly determined the size of subsidy for each consumer category and distribution company in its original decision in accordance with the Rs50 billion subsidy provided in the 2004-05 budget for distribution companies, the KESC and tubewells in Balochistan.

The federal government had asked Nepra to determine tariffs purely on the basis of prudent cost of service and not to quantify the required subsidy because it was within the purview of the federal government.

On this basis, all distribution companies filed review. Accordingly, Nepra revised its earlier determination and held that a maximum of 15 per cent loss could be taken as prudent on the basis of ground realities and average actual losses of distribution companies in the Northern Region i.e. Lahore, Faisalabad, Islamabad and Gujranwala where losses range between 10 and 17 per cent.

In doing so, Nepra also described more than 15 per cent losses as 'imprudent cost' of service and held that this cost could not be recovered from consumers. As for the cash flow need of distribution companies, it was for the government to decide how much subsidy was required to keep them afloat and maintain their uniform tariff, Nepra said.

"We gave the original determination, then we revised it on the basis of review petitions of distribution companies and then again we reconsidered the tariff on the request of the power ministry and rejected it," the Nepra official said.

He said it was now obligatory on the government to notify the tariff without any delay because all requirements of the law had been met. He said if the government did not notify the revised tariff determined by Nepra, the determination would automatically become effective after 15 days.

The official said the federal government would have to decide now how much subsidy it was willing to provide to distribution companies but there was no room for increase in tariff of any consumer category.

The ministries of water and power and finance had earlier estimated that the federal government would be required to provide a subsidy of Rs58 billion, Rs68 billion and around Rs100 billion under three different scenarios to maintain a uniform tariff and keep the distribution companies afloat.

Under the revised determination of Nepra, the average per unit consumer tariff for Islamabad has been fixed at Rs3.782, Faisalabad at Rs3.724, Gujranwala at Rs3.765, Lahore at Rs3.751, Multan at Rs3.774, Peshawar at Rs3.912, Quetta at Rs3.800 and Hyderabad at Rs4.267.

The line losses of the Islamabad, Faisalabad, Gujranwala and Lahore companies are estimated at 14.6 per cent, 14.5 per cent, 16 per cent and 17 per cent, respectively. The losses of the Multan, Peshawar, Quetta and Hyderabad companies have been estimated at 21 per cent, 37 per cent, 22.5 per cent and 39 per cent, respectively.