NEPRA fixes K-Electric multi-year tariff at Rs12.77 per unit

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Islamabad: Much to the chagrin of K-Electric, National Electric Power and Regulatory Authority (NEPRA) on Tuesday announced to raise the multi-year tariff of electricity by Rs0.70 per unit compared to Rs15.5 per unit rate requested by the utility.

Nepra’s announcement of a Rs0.70 increase in multi-year tariff means the revised tariff for K-Electric stands at Rs 12.77 per unit. This tariff will be applicable retrospectively from June 2016, said a local newspaper report.

This multi-year tariff will be enforceable for a period of seven years which started on July 1st, 2016 and ends on June 30th, 2023.

K-Electric announced higher-base tariff wouldn’t affect end-consumer tariff in line with uniform tariff policy applicable across the country.

While announcing its decision, Nepra said K-Electric will seek the services of an independent engineer to conduct heat rate tests within six months once the tariff gets notified. The regulator will be involved in the selection process and appointment of the engineer.

Heat rate tests conducted by the hired engineer will take place in presence of Nepra’s professionals. And regulator hasn’t permitted K-Electric for cost inclusion of doubtful debts in tariff.

But Nepra has allowed K-Electric to write-off bad debts at 1.69pc of its determined sales revenue. In the future, K-Electric will have to follow guidelines set by Nepra for actual write-off.

As per this procedure, power connections could be disconnected for more than three years and guidelines will be followed for recovery of outstanding bills will take place.

Considering ownership of premises not being ascertained, K-Electric will inform the regulator that it had made undue efforts to make the outstanding recovery, but wasn’t unable to.

Written-off amount will only be approved by K-Electric’s Board of Directors. The base tariff has seen the removal of other income, interest on bank deposits and meter rent.

It has been decided that K-Electric will pass on interest earned on security deposits to consumers through their electricity bills.

And regulator has restrained K-Electric from collecting meter rents from consumers who have already paid the meter cost.

Nepra permitted allowed K-Electric to invest Rs298.915b for its generation, distribution and transmission systems over a period of seven years.

And it will take mid-term review of the tariff after a period of four years and if the investment is lower than expected by K-Electric, the base rate adjustment component could be revised.