Rs6.7bn refund to consumers approved by Nepra

National Electric Power Regulatory Authority (Nepra) has approved a refund of Rs 6.7 billion to the consumers of Discos for a period of 12 months on account of Quarterly Adjustment (QTA) pertaining to the 3rd Quarter of FY2020-21.

The allowed benefit amount has an impact of around Paisa 6.7/kWh on uniform basis on all consumers except lifeline and increment industrial sales eligible for industrial support package.

The Authority has decided to start implementation of decision from October 1, 2021 which will remain applicable for one year.

Discos under Single Year Tariff (SYT) regime had filed petitions for determination of tariff for the FY2018-19 & FY 2019-20, and under Multi-Year Tariff (MYT) regime. Discos, such as Iesco, Fesco & Lesco also filed their adjustment/indexation request as per the mechanism prescribed in their MYT determinations for FY 2019-20. The Authority accordingly decided the petitions/adjustment and indexation requests of Discos and intimated it to Federal Government for notification.

However, the Federal Government, against the determinations/decisions, filed a motion on 21 January, 2021, under Section 7, 31(4) and 31(7) of the Nepra Act 1997 for recommendation of uniform consumer end tariff at national level, which was decided by the Authority on 12 February, 2021. The uniform tariff determined by the Authority was notified by the Federal Government on 12 February, 2021.

Based on the adjustment mechanism, as prescribed in the notified tariff, Nepra has already determined quarterly adjustments of Discos till December 2020. Discos in line with the quarterly adjustment mechanism also filed their adjustment requests on account of variation in PPP, including impact of T&D losses, etc., for the third quarter of the FY 2020-21, i.e., from January to March 2020.

Ministry of Energy (MoE), in its letter of July 15, 2021, while referring to the earlier determinations of first and second quarterly adjustment of 6 May, 2021, on uniform basis, with the request to allow the impact of third quarterly adjustments on uniform basis and immediate reflection of it in the monthly bills of consumers of all Discos till its final recovery. Any excess and less adjustment would be settled between Discos at CPPA-G level.

CPPA-G, during the hearing, submitted that Market Operation Fee (MOF), Use of System ((UoS) charges of NTDC and capacity charges of generation companies have been billed to Discos as per the determinations of the Authority. CPPA-G during the hearing and also through its request of June 25, 2021, based on the decision of the Nepra tribunal in the matter of dispute raised by K-Electric to challenge the MDI meter reading was not considered by the Authority in its QTA for the 1st and 2nd quarter of FY2020-21. Accordingly, CPPA-G has recalculated the capacity charges in respect of Discos in light of Nepra tribunal’s decision till March 2021, which worked out at Rs 1.977 billion. CPPA-G accordingly requested to include this amount in the instant quarterly adjustments of Discos for the 3rd quarter of the FY 2020- 21. The Authority in view of the above discussion has decided to include the cost of Rs.1.977 billion in the instant quarterly adjustments.

Accordingly, for working out the quarterly adjustments for the 3rd quarter of the FY 2020-21, the information provided by CPPA-G and the requests filed by Discos have been considered.

Based on the information submitted by CPPA-G, adjustment requests filed by Discos and keeping in view the adjustments, the amount of quarterly adjustment for the 3rd Quarter of FY 2020-21 has been worked out as negative Rs.6.760 billion on account of variation in capacity charges, variable O&M, Use of System Charges, Market Operator Fee and FCA impact on T&D losses.

The Authority has accordingly determined a negative uniform rate of Rs 0.06731kWh for the allowed negative amount of quarterly adjustments of Rs 6.760 billion pertaining to the 3rd quarter of the FY 2020-21, across each category of consumers of Discos (except lifeline consumers), based on projected sales for the FY 2019-20, after excluding therefrom the sales to life line consumers, to be recovered in a 12-month period, starting from the date of its notification. This is not applicable on the consumers of K-Electric.

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