Fuel price adjustments: NEPRA reduces power tariff by 35 paisa

The decision will result in Rs35 billion relief to consumers.

ISLAMABAD:

National Electric Power Regulatory Authority (Nepra) has approved roughly 35 paisa per unit average reduction in power tariff for consumers of power distribution companies (Discos).

The decision – taken after revisiting previous determinations from July 2012 to May 2013 – will result in a Rs35 billion relief to consumers.

It will be applicable to all the users, except lifeline consumers, after review of previous determinations, whose financial impact has been calculated at Rs35 billion.



The decision was taken at a public hearing of the Authority on Thursday where officials of Discos were in attendance. But there was no representation of consumers’ rights bodies, which have allegedly pocketed substantial funding from donors under the guise of consumers.

Likewise there was no representation from Ministry of Water and Power, Ministry of Finance and Ministry of Law and Justice, which could have opposed the regulator’s decision.

During the hearing, Nepra officials revealed that Discos in accordance with notifications from the Government of Pakistan (GoP) received Rs35 billion as Fuel Price Adjustments (FPAs) but collected them from consumers. This implies that Discos collected double the amount i.e., Rs70 billion both from the GoP and the consumers.

According to the officials, Discos had started filing revised monthly fuel adjustment invoices to Nepra.  Nepra officials said the reduction in tariff for July 2012 would be 62 paisa per unit, for August 38 paisa, for October 50 paisa, for November 65 paisa, for December 28 paisa, for 2013 January  62 paisa, for February 21 paisa, for March Rs1.06, for April Rs1.77 and for May 93 paisa.

The authority decided that relief to consumers would be extended during the same months in which an extra amount was collected from them so that the cash flow of Discos is not affected.

Nepra’s decision will not be applicable to Peshawar Electric Supply Company (Pesco) as they did not collect the FPA from consumers in accordance with the apex court order.

The Nepra chairman inquired from the representative of Pesco whether the Disco had chalked out any plan to recover the amount of the FPA from consumers if the court decided in favour of Disco. According to Pesco’s representative the company had to recover Rs54 billion from the consumers as the FPA and tariff.

He also raised the issue of electricity procurement from Gadoon Textile Mills without issuance of generation licence. An insider revealed that Pesco is purchasing power from the textile mill at Rs28 per unit. The mill has already obtained a stay order from the High Court.

Power sector analysts argue that Nepra’s decision will add Rs35 billion to the energy sector circular debt which is at present around over Rs100 billion.

Published in The Express Tribune, November 1^st, 2013.