NEPRA notifies Rs0.99 per unit cut

Decision to decrease tariff made on account of quarterly tariff adjustment

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) on Thursday notified a cut in power tariff by Rs0.99 per unit on the account of quarterly tariff adjustment (QTA).

The reduction in the power tariff will reflect in the bills of consumers from next month.

The move will result in passing on relief of around Rs22 billion to the power consumers.

The decision will be applicable to the consumers of all power distribution companies (DISCOs).

Earlier, in a recent meeting, the federal cabinet had called for not passing on the benefit of negative QTA determined for the 4th quarter of FY2020-21 to non-ToU (time of use) domestic non-protected consumers consuming less than 300 units.

It also demanded that instead of passing on the impact of 99 paisa per unit reduction to all consumers in a quarter, the impact should be phased over 12 months because of liquidity constraints of the power companies.

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However, the cabinet members had opposed this proposal and decided not to accept this demand of the Power Division.

In a notification, the power regulator said a hearing was held attended by ex-WAPDA distribution companies (XWDISCOs), Central Power Purchasing Agency (CPPA-G) and other stakeholders including the public and media.

The CPPA-G had provided the information for the 4th quarter of the FY 2020-21 i.e. April to June 2021.

The CPPA-G, in the costs billed to DISCOs for the 4th quarter of the FY 2020-21, has included legal charges of Rs31.8 million as part of capacity charges.

Nepra said it had decided not to include the amount of legal charges in the instant quarterly adjustments.

Based on the information submitted by the CPPA-G, adjustment requests filed by XWDISCOs and keeping in view the adjustment, Nepra had worked out the amount of quarterly adjustment for the 4th quarter of FY 2020-21 as negative Rs22,479 million.

It was on account of variation in capacity charges, variable operating and maintenance costs, use of system charges, market operator fee and the fuel charges adjustment (FCA) impact on transmission and distribution losses (T&D) losses.

The authority accordingly had determined the impact of 4th quarterly adjustment on uniform basis, which shall be reflected in the monthly bills of consumers of all XWDISCOs.

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Any excess /less adjustment would be settled between XWDISCOs at the CPPA-G level.

The power regulator had determined a negative uniform rate of Rs.0.9908/kWh and allowed a negative amount of quarterly adjustments of Rs22,479 million pertaining to the 4th quarter of the FY 2020-21, across each category of consumers of XWDISCOs (except lifeline and protected category consumers), based on notified projected sales. This excluded the sales to lifeline and protected category consumers.

It will be recovered in three months period with effect of February 1, 2022.

Nepra further pointed out that the authority in its decision made on December 1, 2020, in the matter of a motion filed by the energy ministry (Power Division) with respect to recommendations of the support package for additional consumption and abolishment of time of use tariff scheme for Industrial consumers of XWDISCOs, decided that no quarterly adjustments would be passed on to B1, B2, B3 and B4 industrial consumers to the extent of incremental sales till continuation of the instant package.