Tariff increase of 88pc sought by WAPDA for hydel profits payment to Punjab & KP

A tariff increase of more than 88pc is being requested by the Water and Power Development Authority (WAPDA) in order to pay Rs 88b hydro power profit to Khyber Pakhtunkhwa and Punjab in the next financial year.

In a tariff petition forwarded to the  National Electric Power Regulatory Authority (Nepra), Wapda has sought a rise in its overall tariff from Rs 4.05 per unit (kwh) to Rs 7.30 per unit for 2017-18, an increase of 80.25pc.

The reason for this revision in tariff is due to the Federal government’s agreements with the provinces for guaranteed payment of net hydropower profit. Wapda claims that Rs121bn dues are payable in 2017-18 to the two provincial governments on account of cost plus hydel levies margin, commonly known as net hydel profit (NHP).

The cost head has more than doubled from current year’s Rs 59.8bn. As a result, Wapda has requested about 92 pc increase in hydropower levies to Rs 3.61 per unit for 2017-18 instead of Rs 1.88 per unit being charged to consumers during the current fiscal year.

Wapda has forecast the average cost of its power generation to rise by 70pc to Rs 3.69 per unit (kWh) from Rs 2.17 per unit at present. The total revenue requirement for 2017-18 has been determined at Rs 124b against the current year’s approved revenue requirement of about Rs 69b.

Wapda has evaluated that NHP payments to KP would be Rs 46.5b including Rs20.786b as regular annual payments, Rs15 b to clear the arrears and Rs 10.5b in interest.

Wapda is expected to pay out Rs73 b to Punjab on account of regular NHP of Rs9.5 b and around Rs 62.6b in two instalments of the arrears for two financial years.

 

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