NEPRA approves net relief of Rs4.5bn for consumers

ISLAMABAD: The National Electric Power Regulatory Autho­rity (Nepra) on Thursday concluded eight months of fuel price adjustments for distribution companies of Wapda with a net relief of about Rs4.46 billion to consumers owing to relatively lower rates in international energy markets.

The decision was taken at a public hearing presided over by Nepra Chairman Tauseef H Farooqi on the request of Central Power Purchasing Agency (CPPA) of the Power Division for adjustment of eight months (November 2019 to June 2020) of fuel price that had been put on hold by the government to ensure tariff stability.

Simultaneously, the regulator reserved its judgement on two quarterly tariff adjustments (October 2019 to March 2020) for these Discos and monthly fuel price adjustment and quarterly tariff adjustments for K-Electric for verification of data on the basis of actual invoices.

The ex-Wapda Discos have pleaded recovery of Rs162bn from consumers for two quarters at the rate of about Rs1.60 per unit increase in base tariff.

Based on data provided by CPPA, the regulator approved increase FPA for five months (November to March) and reduction for three (April to June). Since the consumption in earlier months was lower and on the higher side in the subsequent three months, it decided to club together the entire period.

After setting off ups and down on the basis of monthly consumption, the regulator worked out a net reduction of Rs4.46bn over all the eight months. The benefit of Rs4.46bn net reduction in fuel cost would flow to all other consumers.

That would mean the domestic consumers with monthly consumption of up to 300 units and agricultural customers would be on the losing end because they are not entitled to reduction in monthly fuel price under the government decision on the premise that they are already enjoying subsidised rates.

The power regulator had decided increase in electricity rates for five months whose accumulated impact was Rs4.86 per unit and allowed accumulated decrease of Rs3.09 per unit for three months. However, after making adjustment in hike and reduction in electricity rates for eight months, it said that consumers would have accumulated relief of Rs4.46bn.

This relief will be adjusted to consumer bills in August and September and will not be applicable to KE, agriculture tube well and lifeline customers. The accumulated impact of increase has been estimated at about Rs31bn, as against a relief of around Rs35.5bn.

As such, Nepra approved increase of 98 paisas per unit for November 2019, Rs1.88 for December 2019, 93 paisas for January, 39 paisas for February and 68 paisas for March.

On the other hand, it reduced electricity rate by 68 paisas per unit for April, Rs1.17 for May and Rs1.24 for June.

Chairman Nepra raised questions over furnace oil-based power generation in December and Jan­uary and observed that national grid has been noticing faults in transmission system every month but it had no plan to remove them.

The regulator asked the CPPA and Discos to give in writing not to operate furnace oil-based power plants as CPPA had Rs17bn arrears that were piling up due to delay in verification of data on technical grounds.

On the flip side, the regulator conducted public hearing regarding petition of K-Electric Monthly Fuel Charges Adjustment for January to May, Quarterly Adju­s­t­­­ment for the quarters ended December 2019 and March under Multi Year Tariff (MYT) 2017-2023.

It said that it would examine the data provided by KE regarding increase in electricity rates and decision would be issued after verifying that.

KE, in its petitions sought an increase of 66 paisas per unit for January, 97 paisas for February, 48 paisas for March under monthly fuel price adjustment. However, a reduction of 62 paisas has been demanded for April.

The Karachi-based utility has also filed a request for quarterly adjustments in tariffs on account of variation in Power Purchase Price – other than fuel, impact of fuel charges variation, as per the mechanism provided in the Multi-Year Tariff determination. KE, in this regard, has requested a 11-paisa per unit reduction in tariff for October-December 2019 and 24 paisas increase for January-March.

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