Power companies seek tariff reduction

Nepra to hold hearing on March 29.

ISLAMABAD:

Power distribution companies, through the Central Power Purchasing Agency (CPPA), have asked the National Electric Power Regulatory Authority (Nepra) to allow a tariff reduction of Rs0.74 per unit as part of fuel price adjustment for February, officials say.

Nepra has agreed to hold a hearing in this regard on March 29. “We have announced decisions regarding adjustments in the past three months, under the monthly fuel price adjustment formula, but these could not be implemented, as the federal government did not issue relevant notifications,” said a Nepra official.

Nepra sources said the federal government was deliberately withholding a Rs1.33 reduction in power tariff in order to show a lower budget deficit and a decline in subsidies.

Distribution companies have left the fuel price adjustment column blank in February bills sent to consumers and excluded sales tax to reduce the tariff, however, this reduction in tariff produces little advantage for end-consumers.

According to the decision taken by Nepra to provide relief to end-consumers, the tariff had to be reduced by Rs1.66 per unit for two months, but the reduction could not be made, as the government did not issue notifications.

By not transferring the reduction in tariff, the government was able to show favourable statistics to the International Monetary Fund, the reason the budget deficit for the first quarter remained at 2.9 per cent.

Nepra had reduced Rs1.08 per unit for November 2010, Rs0.58 per unit was reduced in December 2010 and Rs0.33 per unit was increased in January 2011, however, these adjustments were not implemented.

Published in The Express Tribune, March 26^th, 2011.