ISLAMABAD: Amid concerns over the mismanagement in fuel utilisation, the National Electric Power Regulatory Authority (Nepra) on Wednesday allowed 41 paisa per unit increase in consumer tariff for ex-Wapda distribution companies (Discos) on account of monthly fuel cost adjustment.

The higher rates for electricity consumed in October would be recovered from customers in the upcoming billing month ie December and would yield about Rs3 billion in additional revenue to the Discos.

The decision was made at a regular monthly public hearing presided over by Nepra Chairman Tariq Saddozai who deplored that tariff should have dropped by 59 paisa per unit with optimum utilisation of cheaper power plants based on coal and LNG, instead of running expensive furnace oil-based plants.

This mismanagement, he argued, deprived the consumers of about 59 paisa per unit relief worth Rs5.34bn lower fuel cost during the month. He ordered the Central Power Purchasing Agency (CPPA) to submit a written explanation on the subject and regulator would take appropriate action.

The CPPA on behalf of Discos had claimed an additional cost of paisa 64 per unit but after examination of data, the regulator allowed 41 paisa per unit hike. The higher tariff will not be charged to lifeline consumers - using up to 50 units per month - but all others including industrial sector and agriculture tube wells would have to bear the additional burden. The decision will not be applicable to K-Electric consumers.

The CPPA in its petition said it had charged consumers a reference tariff of Rs5.23 per unit in October while the actual fuel cost turned out to be Rs5.88 per unit and hence it should be allowed to recover 64 paisa per unit additional cost from consumers next month.

Published in Dawn, November 15th, 2018