DISCOs seek tariff hike of Rs2.18

Increase likely to burden consumers with additional amount of Rs43 billion

ISLAMABAD:

Power distribution companies (Discos), on Tuesday, sought an increase in electricity prices, by Rs2.18 per unit, on account of quarterly adjustment for the financial year 2022-23. The increase is likely to burden power consumers with an additional amount of Rs43 billion.

Electricity consumers were already paying Rs3.30 per unit on account of quarterly adjustments, effective till January 2023. Alarmingly, consumers are also going to pay over Rs30 billion on account of capacity payments in one quarter.

During a public hearing conducted by the National Electric Power Regulatory Authority (Nepra), Discos petitioned for the approval of an increase in electricity rates on account of quarterly adjustments in the first quarter (July-September) of FY 2022-23 to recover Rs43.337 billion in revenue from electricity consumers.

The public hearing was presided over by Nepra Chairman, Tauseef Farooqui. In addition, Nepra members, Rafiq Ahmed Sheikh and Maqsood Anwar Khan were also present.

Unfortunately, consumers are being obliged to pay huge amounts of money to powerplants that have remained idle and have not contributed a single unit to the national grid.

This money is to be recovered from those honest consumers who have been paying regular bills. This is despite the fact that circular debt has been at an all-time high due to inefficiency and power-theft from power distribution companies.

Rather than trying to control power-theft, bring efficiencies and improve the recovery of electricity bills, honest consumers paying regular bills have had to bear the cost of the theft. They have been paying multiple taxes in electricity bills which include tariff rationalisation surcharges, financial cost surcharges and debt service surcharges.

In order not to overburden consumers with tariffs, the Ministry of Power requested the implementation of quarterly adjustments in the months of February and March, said the power regulator.

Nepra further stated that consumers are being charged Rs3.30 per unit for the fourth quarter adjustment of FY 2021-22, which is effective till January, 2023.

“In case of the recovery of quarterly adjustments in these two months, consumers will pay only the previous adjustment,” said Nepra. According to the power regulator, this will be applicable to all Disco customers except lifeline customers.

“It will also not apply to K-Electric (KE) consumers,” said Nepra, adding that the authority will issue its detailed decision after further scrutiny of the data.

During the hearing, Nepra officials said, “If the authority approves the proposed increase, it will amount to Rs2.18 per unit.”

The power distribution companies sought the regulator’s permission to transfer the additional burden of over Rs 43 billion to electricity consumers on account of quarterly adjustments for the first quarter (July-September) of FY 2022-23 under a quarterly tariff adjustment (QTA) mechanism.

In the petition submitted to Nepra, the Discos demanded an increase on account of capacity charges, transmission charges and market operation fee, impact of transmission and distribution (T&D) losses on fuel cost adjustment (FCA) and maintenance charges for the first quarter of FY 2022-23 (July to September 2022).

According to the petition, IESCO sought positive adjustment of Rs2.704 billion, LESCO sought Rs9.101 billion, GEPCO sought Rs5.337 billion, FESCO sought Rs6.377 billion, MEPCO sought Rs10.688 billion, PESCO sought Rs2.129 billion, HESCO sought Rs450 million, QESCO sought Rs3.663 billion, SEPCO sought Rs905 million and TESCO sought Rs1.282 billion.

Discos have sought Rs31 billion on account of capacity charges, Rs6.431 billion on account of UOSC and MOF, Rs2.169 billion on account of variable operation and maintenance (O&M), Rs7.408 billion on account of T&D losses in monthly FCA and negative adjustment of Rs4.248bn of incremental units.

Published in The Express Tribune, November 16^th, 2022.

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