Nepra hikes power tariff by Rs3.39 per unit

Amid ongoing protests against inflated electricity bills, the National Electric Power Regulatory Authority (Nepra) has indicated allowing power distribution companies to raise the power tariff by Rs3.39 per unit on account of quarterly adjustments.

The fresh increase in electricity rates will put an additional burden of Rs94 billion on consumers who were already making a hue and cry over inflated bills.

Critics have argued that the increase in electricity rates is due to faulty agreements with Independent Power Producers (IPPs) made by the previous governments, and inefficiency and power theft by power distribution companies.

The previous governments had appointed heads of power distribution companies on political basis resulting in instances of malpractices and corruption. This has led to the collapse of the energy sector in Pakistan currently trapped in circular debt of multibillion-rupee.

The coalition government has already raised the base tariff by Rs7 per unit that led to a hike in electricity rates in addition to the tariff increases on account of fuel adjustments.

For the last two months, consumers had been staging protests across the country over inflated bills forcing Prime Minister Shehbaz Sharif to extend a fuel adjustment waiver to users utilising up to 300 units per month.

But the major issue was the increase in base electricity rates that had gone up to Rs24 per unit from Rs16 per unit. In addition to high electricity prices, consumers had been paying multiple taxes which also included several surcharges being recovered from power consumers.

This fresh increase in electricity rates will thus lead to another increase in consumers’ bills resulting in further outcry.

Nepra held a public hearing at their headquarters regarding the fourth quarter adjustment of DISCOs for the FY2021-22. DISCOs had submitted a request for an increase of Rs3.39 per unit as part of the fourth quarter adjustment.

The hearing was presided by Nepra Chairman, Tauseef H Farooqui; other Nepra members including Rafiq Ahmed Sheikh and Maqsood Anwar Khan were also present in the hearing.

In a statement Nepra said, “Currently, consumers are being charged Rs3.21 per unit for the previous quarterly adjustments, which will be charged till September and then this quarterly adjustment will be over.” The power regulator added that consumers will be paying an additional 18 paisas per unit for the fourth quarter adjustments compared to previous quarterly adjustments. This will be applicable for a period of three months to all DISCOs customers except lifeline customers.

“The authority will issue its detailed decision after further scrutiny of the data,” they added.

The ex-Wapda DISCOs have also sought Nepra’s approval for the transfer of the burden of Rs94.39 billion to power consumers on account of quarterly adjustments for the fourth quarter of FY2021-22.

In its petition submitted to Nepra, XWDISCOs had demanded an increase of approximately Rs3.1 per unit on account of capacity charges, variable operation and maintenance charges, transmission charges, market operation fee and the impact of T&D losses on FCA for the second quarter of FY 2021-22 (April to June 2022).

XWDISCOs had also demanded Rs54.663 billion on account of capacity charges, Rs14.163 billion on account of UOSC and MOF, and Rs35 billion on account of T&D losses.

In their petitions, Islamabad Electric Supply Company (IESCO) has demanded a recovery of Rs8.729 billion, LESCO Rs17.816 billion, GEPCO Rs9.257 billion, FESCO Rs11.624 billion, MEPCO Rs19.534 billion, PESCO Rs12.274 billion, HESCO Rs5.298 billion, QESCO Rs3.163 billion, SEPCO Rs2.995 billion and TESCO Rs3.708 billion.

Published in The Express Tribune, September 7^th, 2022.

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