Another hike in power tariff expected for inflation-hit masses

• Discos ask Nepra to recover Rs81.5bn from consumers.
• Recovery has major chunk of 92.2% as capacity charges.
• This second quarterly tariff will also apply to KE customers. 

ISLAMABAD: It seems there will be no respite for the masses reeling from high electricity prices as the National Electric Power Regulatory Authority (Nepra) is expected to hike power tariffs in the coming months, The News reported Wednesday. 

The state-owned power distribution companies (Discos) have formally requested approval from the Nepra to recover Rs81.5 billion from consumers.

The sought recovery pertains to various adjustments for the second quarter of the fiscal year 2023-24, spanning October to December 2023. This recovery has a major chunk of 92.2% or Rs75.1 billion as capacity charges from the power consumers to be paid to the private power generators. 

Once the Nepra determines the per unit additional charges for Discos, the same will apply to the K-Electric as well. 

In light of the policy guidelines issued by the federal government for the application of uniform quarterly adjustments, this second quarterly tariff adjustment (QTA) for FY2023-24 to be determined by Nepra shall also apply to the customers of K-Electric. 

The power regulator has decided to hold a public hearing on the petition on February 14, 2024. Discos in their petition had demanded an increase in tariff on account of capacity charges, transmission charges, the impact of incremental units, market operation fees, the impact of transmission and distribution (T&D) losses on FCA and other variable operation and maintenance charges for the quarter. 

As per the petition, Islamabad Electric Company (Iesco) had sought additional adjustment of Rs6.921 billion, Lahore Electric Supply Company (Lesco) Rs15.105 billion, Gujranwala Electric Power Company (Gepco) Rs2.663 billion, Faisalabad Electric Supply Company (Fesco) Rs9.446 billion, Multan Electric Company (Mepco) Rs14.884 billion, Peshawar Electric Supply Company (Pesco) Rs11.583 billion, Hyderabad Electric Supply Company (Hesco) Rs3.524 billion, Quetta Electric Supply Company (Qesco) Rs10.983 billion, Sukkur Electric Power Company (Sepco) Rs2.879 billion and Tribal Electric Supply Company (Tesco) Rs3.51 billion. 

Of the total amount of Rs81.5 billion, Discos have sought to include Rs75.1 billion on account of capacity charges, Rs6.587 billion on account of use of system charge (UoSC) and market operator fee (MOF), Rs10.818 billion on account of T&D losses in monthly FCA and negative adjustment of Rs2.335 billion of incremental units. Another negative adjustment is of variable O&M charges. 

Discos’ inefficiencies, power losses, and theft in systems would be recovered from loyal consumers in the form of these recoveries. Multiple taxes, the consumers were paying on these additional charges, were another burden on the consumers. Only the 18% GST on this amount will add up to another burden of Rs14.67 billion on the power consumers.