The National Electric Power Regulatory Authority (Nepra) has given the green light to an electricity rate increase of up to Rs3.28 per unit, adding an additional cost of Rs135.5 billion to consumers.
This adjustment falls under the quarterly tariff adjustment (QTA) and is aimed at covering the additional expenses resulting from currency devaluation, interest rate hikes, and related factors.
The recent tariff increase is attributed to various factors, including capacity charges, Variable O&M, additional recovery on incremental sales, use of system charges, Market Operator Fee, and the FCA impact on T&D losses for the fourth quarter of FY2022-23.
Earlier, consumers were paying an extra Rs1.25 per unit due to ongoing quarterly adjustments, with these adjustments set to conclude in September. Now, the new Rs1.25 per unit charge will persist, with an additional Rs2.03 per unit added for the next six months.
Originally, the Power Division had requested an increase of Rs 6.20 per unit for the fourth quarter of the 2022-23 fiscal year for ex-Wapda distribution companies (Discos) to address Rs 146 billion financing gap within three months. However, due to fear of public outcry against the steep tariff hike, they later sought Rs 3.55 per unit increase over six months.
Nepra has now granted permission for positive quarterly adjustments of Rs135.5 billion, applicable to the fourth quarter of FY 2022-23. These charges will be recovered from consumers of ex-WAPDA Distribution Companies between October 2023 and March 2024.
The power regulator also recommended that the government consider maintaining a uniform consumer-end tariff for K-Electric (KE) and state-owned distribution companies, even after privatization, potentially through direct or indirect subsidies. Consequently, KE consumers will be billed at a rate of Rs3.2814 per kWh, with recovery taking place over the same six-month period from October 2023 to March 2024.
The impact of the electricity tariff increase will vary across different consumer categories. For households with a sanctioned load of less than 5kW, notable changes have been introduced, while the “Life Line” category for those using up to 50 or 51-100 units remains unaffected.
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