Another hike in power tariff expected for inflation-hit masses. As consumers grapple with the burden of soaring electricity prices, the National Electric Power Regulatory Authority (Nepra) stands at the forefront of a crucial decision.
Discos, or state-owned power distribution companies, have formally sought Nepra’s approval to recover a substantial Rs81.5 billion from consumers.
This sought-after recovery encompasses various adjustments for the second quarter of the fiscal year 2023-24, spanning from October to December 2023.
Key Points:
- Capacity Charges Dominate Request:
- A staggering 92.2% of the sought recovery, equivalent to Rs75.1 billion, revolves around capacity charges. These charges are intended to be paid to private power generators.
- Uniform Quarterly Adjustments:
- Nepra’s impending decision is aligned with federal government policy guidelines, ensuring uniform quarterly adjustments. Consequently, this second quarterly tariff adjustment (QTA) for FY2023-24 is expected to be applied universally, impacting not only Discos but also the customers of K-Electric.
- Public Hearing Scheduled:
- Nepra has scheduled a crucial public hearing on the petition for February 14, 2024, underscoring the significance of public participation in this decision-making process.
- Reasons Behind Tariff Increase:
- Discos, in their petition, cite various factors necessitating a tariff increase. These include capacity charges, transmission charges, the impact of incremental units, market operation fees, transmission and distribution (T&D) losses on FCA, and other variable operation and maintenance charges for the specified quarter.
- Breakdown of Additional Adjustment Requests:
- Different power distribution companies have submitted specific additional adjustment requests. For instance, Iesco seeks Rs6.921 billion, Lesco Rs15.105 billion, and so forth. The breakdown includes capacity charges, use of system charge (UoSC) and market operator fee (MOF), T&D losses in monthly FCA, and negative adjustments for incremental units and variable O&M charges.
Impact on Consumers:
- Unfortunately, these sought recoveries will translate into an increased financial burden on loyal consumers. Discos‘ inefficiencies, power losses, and system theft will be recovered from the pockets of consumers.
- Furthermore, consumers will face the added strain of multiple taxes on these charges. Notably, the 18% GST alone is anticipated to contribute an extra burden of Rs14.67 billion on power consumers.
As another hike in power tariff expected for inflation-hit masses, Consumers remain hopeful for a fair and transparent decision that balances the need for revenue recovery with the concerns of an already financially strained public.
