Nepra reserves judgment to hike power tariff by 17 paisas per unit

Islamabad    –     The government has Wednesday acknowledged that the tariff increase due to multiple adjustments has become unaffordable for the power consumers, however said that these increase are as per the law and rules.

In a public hearing over the ex-Wapda distribution companies (Discos) petition for the transfer the burden of Rs17.2 billion to power consumers on account of power purchase price (PPP) for the first quarter of 2019, the National Electric Power Regulatory Authority (Nepra) reserved its judgment.

The government has requested to increase electricity tariff by 17 paisa per unit to generate Rs17.2 billion additional revenue for Discos.

At a public hearing presided over by Nepra Chairman Tauseef H Farooqi, the participants questioned over the continuous increase in power tariffs on the pretext of various adjustments including monthly fuel price adjustment, annual increases in base tariff, quarterly tariff adjustments and prior year adjustments. The participants also said that these were increase on the basis of adjustments are getting unaffordable for the power consumers.

They also questioned that why an increase of Rs 3 billion was being sought by the Discos on account of fuel costs as this component was part of the monthly fuel price adjustment and was automatically recovered from the consumers.

Nepra Chairman and other members agreed to and asked joint secretary of the power division Zargham Eshaq Khan to respond the queries raised by the participants.

Joint Secretary Power division conceded that power tariffs have become unaffordable but said the increases being made were under the laws and the rules. Zargham has argued that government was making other policy interventions like promotion of renewable energy projects and offering incremental power consumption at a flat rate of Rs11.97 per unit for relief.

The distribution companies have filed their request for adjustments on account of variation in the power purchase price for the first quarter (July-September 2019) in line with the notified mechanism.

The power companies have demanded the highest increase of Rs11.2 billion on account of transmission and distribution losses, Rs3.5 billion on account of higher fuel costs and Rs3.46 billion for OM charges.

The additional expenses of eight Discos have been reported to have gone higher than originally estimated. The expenses of two Discos of Faisalabad and Tribal Electric have been reported on the lower side during the quarter. These two Discos have proposed a benefit of Rs946million and Rs991million respectively to be passed on to the consumers because of their lower than estimated expenses.

According to the petition by Discos, Islamabad Electric Supply Company (IESCO) has asked for Rs1.445 billion, Lahore Electric Supply Company (LESCO) for Rs5.05 billion, Gujranwala Electric Power Company (GEPCO) for Rs1.536 billion, Multan Electric Power Company (MEPCO) for Rs2.215 billion, Peshawar Electric Supply Company (PESCO) for Rs3.67 billion, Hyderabad Electric Supply Company (HESCO) for Rs2.506 billion, Quetta Electric Supply Company (QESCO) for Rs1.53 billion, while Sukkur Electric Supply Company (SEPCO) has asked for adjustment of Rs1.19 billion.

It is worth mentioning here that for the first quarter of 2019, the NEPRA had allowed an increase of Rs71.2 billion to Ex-WAPDA Discos on account of monthly fuel cost adjustments. For July, NEPRA had allowed an increase of Rs1.78 per unit in power tariff, for August Rs1.66 per unit and for September Rs1.8266 per unit to Ex-WAPDA Discos on account of fuel cost adjustment.

Article source: https://nation.com.pk/21-Nov-2019/nepra-reserves-judgment-to-hike-power-tariff-by-17-paisas-per-unit