Consumers of electricity in Pakistan are on the verge of another financial shock as Power Distribution Companies (DISCOs) seek approval from the National Electric Power Regulatory Authority (NEPRA) to recover a staggering Rs81.5 billion through quarterly adjustments for the second quarter of the financial year 2023-24 (October to December 2023).
The burden primarily stems from capacity charges for power plants that remained idle during this period, and this additional financial strain will be passed on to consumers who are already grappling with mounting electricity bills.
DISCOs have formally submitted an application to NEPRA, indicating that if their request is approved, consumers could face a substantial hike in power tariffs, exacerbating the financial challenges faced by households and businesses alike.
In their plea to NEPRA, DISCOs are seeking a total of Rs81,498 million, covering capacity charges, User Service Charges (UoSC) & Market Operator Fee (MoF), and the impact of Transmission & Distribution (T&D) losses on monthly Fuel Charges Adjustment (FCA). The breakdown includes a substantial Rs75,139 million for capacity charges and Rs10,818 million for the impact of T&D losses on monthly FCA.
Individual DISCOs have submitted specific requests for adjustments, including Faisalabad Electric Supply Company (FESCO) seeking Rs9,446 million, Gujranwala Electric Power Company (GEPCO) seeking Rs2,663 million, Hyderabad Electric Supply Company (HESCO) eyeing Rs3,524 million, Islamabad Electric Supply Company (IESCO) eyeing Rs6,921 million, Lahore Electric Supply Company (LESCO) eyeing Rs15,105 million, Multan Electric Power Company (MEPCO) eyeing Rs14,884 million, Peshawar Electric Supply Company (PESCO) seeking Rs11,583 million, Quetta Electric Supply Company (QESCO) seeking Rs10,983 million, Sukkur Electric Power Company (SEPCO) eyeing Rs2,879 million, and Tribal Electric Supply Company (TESCO) seeking Rs3,510 million.
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The federal government’s policy guidelines mandate uniform quarterly adjustments, and NEPRA is set to determine the second-quarter adjustment for the FY2023-24, applicable not only to DISCOs consumers but also to those served by K-Electric.
To deliberate further and arrive at an informed decision, NEPRA has scheduled a hearing for February 14, 2024, both at its headquarters and online. The public hearing notice invites all interested or affected parties to submit written or oral comments, objections, or concerns in accordance with the law.
In line with the notified tariff mechanism, DISCOs have filed their requests for adjustments, covering capacity charges, transmission charges, market operator fees, the impact of incremental units, and the impact of T&D losses on FCA, as well as variable operations & maintenance charges for the second quarter of FY2023-24.
Published in The Express Tribune, January 31st, 2024.
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