NEPRA Determines Consumer-End Tariff for FY 2023-24, Average Tariff Increased by Rs. 4.96/unit

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has finalized the consumer-end tariff for the fiscal year 2023-24, with the national average tariff experiencing an increase of Rs. 4.96 per kilo watt hour (kWh) compared to the previous year.

NEPRA’s determination for the fiscal year 2023-24 reveals a revised national average tariff of Rs. 29.78/kWh, showcasing an increase of Rs. 4.96/kWh compared to the previous rate of Rs. 24.82/kWh. This adjustment accounts for various contributing factors within the power sector.

The rise in the national average tariff can be attributed to multiple aspects, including overall low sales growth, the devaluation of the Pakistani Rupee, high inflation rates, exorbitant interest rates, and the incorporation of new capacities to meet growing demands.

To fulfill the revenue requirements of the distribution companies (DISCOs), a total projected revenue of Rs. 3,281 billion has been established for the fiscal year 2023-24. This projection is based on an estimated sales volume of 110,165 GWh.

NEPRA’s determination process takes into consideration the distinct revenue requirements and allowed levels of transmission and distribution losses for each distribution company, known as DISCO. This approach ensures a fair and customized tariff structure based on the unique circumstances of each company.

Once NEPRA establishes the consumer-end tariff, it is then forwarded to the Federal Government, which files a uniform tariff application. Upon approval, the uniform tariff, inclusive of any subsidies or surcharges communicated by the government, is officially notified and implemented for consumers.

Aligning with the multi-year tariff regime, numerous distribution companies, including MEPCO, GEPCO, HESCO, SEPCO, QESCO, PESCO, and TESCO, have filed adjustment/indexation requests for the fiscal year 2023-24. These requests aim to cater to the specific requirements of each company.

In addition, IESCO, LESCO, and FESCO have submitted multi-year tariff petitions, encompassing the period from 2023-24 to 2027-28. Alongside these petitions, they have also sought an interim tariff for the upcoming fiscal year.

It is essential to note that any potential relief or decrease in tariffs in the future will directly benefit consumers if there is appreciation of the Pakistani Rupee, a decrease in inflation rates, interest rates, or other relevant factors. This ensures that adjustments are made to maintain a fair and balanced tariff structure.

NEPRA’s determination of the consumer-end tariff plays a crucial role in shaping electricity pricing, emphasizing the challenges posed by economic factors impacting the energy sector. The effective management of transmission and distribution losses remains a priority to establish a transparent and sustainable system for electricity consumers.

The implementation of the determined tariffs will not only ensure a fair and transparent system for consumers but also support the financial sustainability of distribution companies. NEPRA’s decision sets the stage for the upcoming fiscal year, providing guidance for the electricity sector’s operations and facilitating a reliable and efficient power supply.