Hike in power tariff of Rs2.50 per unit on the cards

NEPRA reserves judgement in petition to revise base tariff for recovery of Rs202b

Zafar Bhutta March 14, 2019

ISLAMABAD: A hefty increase in electricity prices of up to Rs2.50 per unit is on the cards as the National Electric Power Regulatory Authority (Nepra) on Wednesday reserved judgment relating to a petition filed by the Central Power Purchasing Agency Guaranteed (CPPA-G) to revise base tariff up to recover Rs202 billion from consumers.

The power regulator conducted a public hearing in Nepra on a quarterly adjustment  of power distribution companies on account of variation in Power Purchase Price (PPP) for the quarters July to September 2018 and October to December 2018.  As per the notified consumer end tariff methodology guidelines, the authority in view of any abnormal changes, may review the monthly fuel cost references built in the tariff along with quarterly adjustments. In view thereof, the authority has decided to deliberate the issue of revision in the fuel cost references built in the currently notified tariff effective from January 1, 2019.

CPPA-G Chief Executive Officer Abid Lodhi argued that Nepra should consider issuance of notification of quarterly adjustment on the pattern of monthly Fuel Price Adjustment (FCA) mechanism. He further stated that the new references should also be changed through separate hearing for 2019-20 to make it a benchmark.

Responding to a question raised by Nepra Member Saifullah Chatha, the CPPA-G CEO stated that with the mechanism, regulatory compliance will be accomplished. He maintained that the authority has formulated this mechanism to evaluate over and above the actual price. He opposed interlinking of monthly FCA with quarterly mechanism. At this stage, it should be deferred for a quarter. He argued that the process of proceedings of quarterly adjustment must be completed in two months, which will be a benchmark for future tariff, adding that establishing number of revenue requirements will be finalised in two months.

Published in The Express Tribune, March 14th, 2019.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.