Govt takes flak for seeking Rs81.5b from consumers

DISCOs want to recover amount on account of capacity charges, T&D losses

ISLAMABAD:

The government has come under fire for seeking permission from the regulator for recovering Rs81.5 billion from honest consumers paying bills regularly on account of capacity charges and losses caused by theft and leakages.

Interveners called on the regulator to take strict action to fix the problem. The National Electric Power Regulatory Authority (Nepra) held a public hearing on Wednesday to review a petition in which power distribution companies (DISCOs) sought the recovery of Rs81.5 billion from consumers under quarterly adjustment for the second quarter of financial year 2023-24.

It was informed that DISCOs wanted to collect a total of Rs75,139 million on account of capacity charges and Rs10,818 million to recover transmission and distribution (T&D) losses under the monthly fuel charges adjustment (FCA).

“Is there any end to the capacity charges that are going to rise further in future after installation of more power projects,” an intervener said during the hearing.

Capacity payments go to the power plants which remain idle and do not produce any electricity but consumers are compelled to pay due to the agreements signed by different governments with power producers on a “take-or-pay” basis.

The hearing was told that electricity consumption had decreased by 12-13% in the second quarter of FY24.

Regarding efforts to reduce circular debt, the regulator said that it was not satisfied with the measures being taken in this regard. It also expressed displeasure over the absence of senior officials of DISCOs from the public hearing.

Nepra chairman stressed that they should be present to respond to the challenges being faced by the public.

“Neither the Central Power Purchasing Agency-Guarantee (CPPA-G) CEO turned up nor anyone came from the Power Division,” a member Nepra remarked and asked, “why has power consumption decreased in the country”.

The member Nepra observed that rampant load-shedding was happening in the areas of electricity companies while consumers were forced to make capacity payments.

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“Electricity companies are not interested in providing new power connections,” remarked Member Nepra Rafiq Shaikh.

It was noted that electricity connections that required consumption of 1,100 megawatts had been pending but DISCOs were claiming that power consumption had dropped.

The regulator announced that it would issue a decision after the scrutiny of data.

According to the petition, DISCOs sought a total of Rs81,498 million on account of capacity charges and the impact of T&D losses on the monthly FCA.

Faisalabad Electric Supply Company (Fesco) is looking to recover Rs9,446 million, Gujranwala Electric Power Company (Gepco) Rs2,663 million, Hyderabad Electric Supply Company (Hesco) Rs3,524 million, Islamabad Electric Supply Company (Iesco) Rs6,921 million, Lahore Electric Supply Company (Lesco) Rs15,105 million, Multan Electric Power Company (Mepco) Rs14,884 million, Peshawar Electric Supply Company (Pesco) Rs11,583 million, Quetta Electric Supply Company (Qesco) Rs10,983 million, Sukkur Electric Power Company (Sepco) Rs2,879 million and Tribal Electric Supply Company (Tesco) Rs3,510 million.

According to the policy guidelines issued by the federal government for the application of uniform quarterly adjustments, the FY24 second quarter adjustment for DISCOs, to be determined by Nepra, will be applicable to the consumers of K-Electric as well.

To proceed further and arrive at a just and informed decision, Nepra conducted the hearing on Tuesday.

Pursuant to the notified tariff, DISCOs filed requests for adjustments on account of capacity charges, transmission charges, market operator fee, the impact of incremental units and T&D losses on FCA, and variable operation and maintenance charges for the second quarter of FY24, October-December 2023, in line with the notified mechanism.

Published in The Express Tribune, February 15^th, 2024.

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