ISLAMABAD, May 13: The National Electric Power Regulatory Authority has admitted for public hearing tariff petitions of all the distribution companies of the Water and Power Development Authority seeking increase in prices to meet their losses of Rs23 billion. An official told Dawn on Friday that the ministry of water and power had convened a meeting on Saturday to issue fresh policy guidelines to Nepra on tariff determination.

The government was suggesting to Nepra that it should take a soft approach towards Wapda companies and provide them breathing space for the transitional period so that they were able to stand on their own feet, the official said.

The official said the public hearing and tariff finalization process would take more than two months.

The basic principle was that power companies should not be allowed to recover more than 15 per cent of their losses from the consumers, sources said.

Wapda, however, believes that it is not realistic in the prevailing circumstances because public sector consumers owe about Rs84 billion to Wapda companies.

It has taken the stand that its corporate companies were facing a cumulative loss of Rs23 billion, which should be recovered from the consumers or covered by the government as subsidy.

The government had previously blocked the notification of tariff determinations issued by Nepra on two occasions.

It was done because Nepra had asked for overall tariff reduction of about 13 per cent in two phases while the government wanted to provide over Rs15 billion windfall benefit to Wapda companies by maintaining a freeze on electricity rates.

Another reason for the move was that implementation of the determinations would have resulted in complete financial autonomy to the power companies and different tariffs for those.

The government and Wapda also did not wanted to lose their authority over the distribution companies and they re-negotiated the deadline for the purpose with the World Bank to June 30, 2005, from Dec 31, 2004.