ISLAMABAD, April 16: The National Electric Power Regulatory Authority (Nepra) on Friday allowed National Transmission and Dispatch Company (NTDC) to charge a minimum fixed tariff of Rs73.4 per kilowatt per month in addition to seven paisa per unit (Kwh) and losses from the distribution companies and bulk consumers.

This becomes the first step towards the setting up of the so-called free electricity market where NTDC would purchase electricity from generation companies at a tariff to be approved by Nepra, then add its transmission charges and then sell it to the distribution companies and bulk consumers.

The distribution companies (Discos) would then add their losses and operation and maintenance costs and fix a consumer tariff with the approval of the Nepra. As such, the consumer tariffs are set to increase manifold in certain parts of the country particularly Hyderabad and Quetta.

A Nepra member told Dawn that the Nepra would start announcing consumers tariffs for Discos by end of this month and complete the process by July this year. Faisalabad Disco would be the first one to have a separate tariff.

The NTDC will charge for transportation of power from generator to the DISCOs and Bulk Power consumers a Use of System Charge. The event is a major step towards completing the process of implementation of the strategic plan for Power Sector restructuring envisaged by the federal government in 1985.

Consequent to the determination, the NTDC has been entrusted with the responsibility of procuring power from the Power Producers (approved by Nepra) through the Central Purchasing Agency (CPPA) on behalf of Ex-Wapda distribution companies for a period determined for each GENCO.

NTDC will procure power as a central purchaser on behalf of the DISCOs from all Hydroelectric Generating Stations owned and operated by Wapda, Chashma Nuclear Power Generating station, all IPPs selling power to Wapda under a long-term contract for which sovereign guarantees have been provided by the federal government, the thermal generation companies formed out of unbundling of Wapda for a period up to 01.07.2009 or till the Competitive Market Operation Date determined by the Authority, whichever is later.

The NTDC would also purchase electricity from other generation entities in the public sector, private sector or under public-private partnership, initiated, sponsored or developed by the federal government or any provincial government approved by Nepra to provide power to NTDC for onward delivery to the DISCOs for a specific period.

Furthermore, it would import sources of electricity from another country or the territory of Azad Jammu and Kashmir on approval of the federal government for provision of power to meet the demand of any or all of the DISCOS as approved by NEPRA.

A mechanism has been prescribed to charge the DISCOs a transfer price, i.e a sale rate determined by adding the costs of the power generated during a billing period and adding a transmission charge to it.

The Nepra has already determined the tariff for three thermal generation companies of WAPDA. It is currently in the process of finalization of tariff determinations relating to the petitions filed by Ex-Wapda distribution companies, after which the segregation of independent power distribution companies carved out of Wapda will be completed.