Power charges likely to go up by Rs4.5

The power tariff in the country is likely to go up by Rs4.5 per unit, imposing an additional burden of Rs59.45 billion on the consumers.

The Central Power Purchasing Agency (CPPA-G) has submitted a request to the National Electric Power Regulatory Authority (Nepra) to increase the price of electricity on account of fuel charges adjustment for the month of April.

The power regulator said it would hear the petition on May 31. With the exception of K-Electric, the CPPA-G rate hike applies to all other power distribution companies.

Earlier this month, Nepra had approved increasing the electricity prices by 57 paisas per unit for the July-September quarter of the current fiscal year – a move that would put an additional burden of Rs14.3 billion on the consumers.

In a statement, the power regulator added that the allowed quarterly adjustment had an impact of around 57 paisas per unit on uniform basis on all consumers except for lifeline and Increment industrial sales eligible for Industrial Support Package.

Under the amended Nepra law, the federal government will have a certain time to notify the quarterly adjustment. In case it neither notifies the quarterly increase in prices, nor does it make a representation to the government, the increase will automatically take effect after 15 days of the determination. Nerpa said the 57 paisas per unit increase in prices would be charged from the consumers from June.
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The Nepra law has been amended on the condition of the International Monetary Fund aimed at ending the government’s discretion in notifying the tariff increase. The law now empowers Nepra to automatically increase the monthly and quarterly tariff adjustments, in case the government decides to delay the orders.

Last month, Nepra had raised the power tariff by Rs4.8 per unit on account of fuel adjustment for the month of February. The CPPA-G had requested the power regulator to allow an increase of Rs4.9441 per unit to burden the power consumers with an impact of Rs38.4 billion.

The power regulator conducted a public hearing on March 31, 2022. However, it approved an increase of Rs4.8530 per unit to put an additional burden of around Rs37.7 billion on power consumers.

The power distribution companies charged fuel cost adjustment (FCA) of February 2022 in the billing month of April 2022 from all consumer categories of XWDISCOs, except lifeline and K-Electric consumers.

The authority had observed that the CPPA-G had purchased energy of 33.822 GWH from Tavanir Iran in February 2022 at a cost of Rs530.628 million.

However, the contract between the CPPA-G and Tavanir Iran for the import of power up to 104 MW expired on December 31, 2021.

In view of this, the power regulator allowed the cost of electricity purchased from Tavanir Iran strictly on a provisional basis, subject to its adjustment once the authority decided on the extension in the contract between the two companies or otherwise.