NEPRA reserves decision on Rs7.91/unit hike in power price

Power Division assures lifeline, protected consumers will not be affected

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) on Wednesday reserved its judgement on a hearing over the approval of a Rs7.91 per unit increase in the power tariff in three phases.

The hearing took place following the submission of an application by the federal government which recommends a hike in the consumer end tariff for power distribution companies including DISCOs and K-Electric, NEPRA.

The hearing was held under NEPRA chairman Tauseef H. Farooqi. 

A statement issued by NEPRA in this regard read that the authority will soon send its decision to the federal government for issuing a notification regarding a power tariff hike in phases.  

Speaking on the occasion, NEPRA chairman said that the authority had determined the power tariff while keeping the dollar exchange rate at Rs200 which has now reached at Rs 226.    

“It is NEPRA’s job is to approve the tariff while it is the government’s prerogative to allocate the subsidy,” he said. 

However, officials of the Power Division informed NEPRA that there will be no increase in the tariff for lifeline consumers and the protected category of consumers, adding that the government will give a Rs220 billion subsidy despite an increase in the price of power so that this hike does not affect at least 50 per cent of consumers.   

NEPRA officials warned that though the federal government has submitted an application to jack up the power price by Rs3.50/unit from July 1, a Rs3.50/unit increase from August 1 and a 91 paisa/unit hike from October, prices can go further up due to a decrease in the value of local currency against the dollar as well as quarterly adjustments. 

“The price of electricity currently stands at Rs27/unit inclusive of all taxes. However, the tariff might increase to Rs40/unit if all taxes are included,” they added.

It is relevant to note that earlier, the authority, after conducting a hearing, had forwarded its decision of a Rs7.9/unit hike to the Energy Ministry and asked the government to issue notification in this regard. 

The authority approved the hike due to an increase in fuel prices, capacity cost, and impact of rupee devaluation. 

Following NEPRA’s decision, the Shehbaz Sharif-led coalition government had also approved a massive Rs7.91 per unit gradual hike in the base power price, directing the authority to take further steps in this regard.

The tariff hike for the financial year FY23 was determined to be Rs24.82 per kilowatt hour (kWh) on the national average , higher by Rs7.9078 per kWh than the earlier determined national average tariff of Rs16.91 per kWh, said NEPRA.

According to NEPRA, power distribution companies (DISCOs) including Multan Electric Power Company (MEPCO), Gujranwala Electric Power Company (GEPCO), Hyderabad Electric Supply Company (HESCO), Sukkur Electric Power Company (SEPCO), Quetta Electric Supply Company (QESCO), Peshawar Electric Power Company (PESCO) & Tribal Electric Supply Company (TESCO) filed multi-year tariff petitions for the period from FY21 to FY25 whereas the Islamabad Electric Supply Company (IESCO), Lahore Electric Supply Company (LESCO) & Faisalabad Electric Supply Company (FESCO) filed annual adjustment requests under the already allowed multi-year tariff.

Energy Purchase Price (EPP) was projected as Rs1,152 billion, while capacity charges including NTDC and HVDC cost was projected as Rs1,366bn and total revenue requirement of DISCOs including DISCOs margin and Prior Year Adjustment (PYA) was projected as Rs2,805bn with projected sales of 113,001 GWh.

Profit also learnt that MEPCO, GEPCO, HESCO, SEPCO, QESCO, PESCO & TESCO were earlier allowed an investment of around Rs406bn for their distribution investment program for a five years period while DISCOs allowed T&D losses were reduced from 13.46pc to 11.70pc for FY23.

 

 

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Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected]

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