Nepra clears power tariff cut of Rs2.8

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday approved a Rs2.8 per unit reduction in the power tariff on account of fuel adjustment for the month of September, as oil prices in the international market remained depressed  for another month.

The approval was given at a public hearing on the monthly fuel price adjustment mechanism attended by officials of the Central Power Purchasing Agency (CPPA) and the tariff section of Nepra. The regulator’s chairman, Tariq Sadozai, chaired the hearing.



According to Nepra, consumers would enjoy a combined relief of Rs25 billion in their monthly bills following the tariff reduction. However, domestic consumers who use up to 300 units a month will not be able to enjoy the relief and will continue to pay a higher price for electricity.

Some officials suggested that the tariff cut was intended to reimburse bills collected by the CPPA after charging consumers a reference price. They said the regulator had been intentionally delaying the reimbursement on the finance ministry’s insistence.

Nepra was originally supposed to reimburse the Rs25 billion to consumers in bills for November, they said. Consumers will now benefit from the relief in January next year. This was done to allow the ministry to make money on the basis of interest received in return for keeping CPPA money in banks during this time, the officials added.



“The regulator should have revised the reference fuel price following the dip in global oil prices but high-ups in Nepra opposed the plan in a bid to enable CPPA to keep money collected from the consumers in banks,” one official said.

According to a petition filed by the CPPA with Nepra, the fuel cost of electricity delivered to distribution companies was calculated at Rs3.65 per unit in June against the reference price of Rs6.43 per unit, which suggested that the consumers should be returned Rs2.78 per unit.

The total volume of energy generated from all fuel sources stood at 9,619.47 gigawatt hours in the month costing Rs35.62 billion. However, the CPPA supplied 9316.07 gigawatt hours electricity to the distribution companies at cost of Rs34 billion.


Published in The Express Tribune, October 23^rd, 2015.