NEPRA approves three-phased Rs7.91 hike in power tariff

Consumer-end tariff will be increased in July, August, and October

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) on Friday approved the federal government’s request to hike charges for the provision of electricity and issued directions to relevant authorities for jacking up the power tariff by Rs7.91 per unit in three phases.

According to the details, the consumer-end tariff would be increased in July, August, and October. However, the authority’s decision would be applicable once the federal government notifies the same.

According to NEPRA’s statement, the tariff has been determined for the financial year (FY) 2022-23, which on the national average is Rs24.82 per Kilowatt hour (kWh), higher by Rs7.91 kWh than the earlier determined national average tariff of Rs16.91/kWh.

Earlier, the authority had determined the tariff hike and intimated its decision to the federal government which filed a motion for the determination of a uniform consumer-end tariff after incorporating subsidies and surcharges for all the power distribution companies (DISCOs) and K-Electric.

On Thursday, the authority held a hearing under NEPRA chairman Tauseef H. Farooqi following the submission of an application by the federal government which recommended a hike in the consumer-end tariff for power distribution companies including DISCOs and K-Electric, NEPRA. 

While reserving its decision on the matter, the authority issued a statement that it would send its decision to the federal government for issuing a notification regarding the hike.

Speaking during the course of Thursday’s hearing, the NEPRA chairman said that the authority had determined the tariff while keeping the dollar exchange rate at Rs200 which has now reached at Rs226. “NEPRA’s job is to approve the tariff while it is the government’s prerogative to allocate a subsidy,” he added.

However, officials of the Power Division informed the authority that there will be no increase in the tariff for lifeline consumers and the protected category of consumers, explaining that the government will give a Rs220 billion subsidy so that the latest hike does not affect at least 50 per cent of consumers.  

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 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 has been determined at 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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