The Power Division has proposed imposition of surcharge at Rs 1.52 per unit on consumers of K-Electric (KE) to recover an amount of Rs 204 billion as pending Quarterly Tariff Adjustments (QTAs) in 12 months, well-informed sources told Business Recorder.
According to available details background of the case was discussed by the ECC in its meeting March 26, 2020 and September 21, 2021. The ECC in both the meetings discussed and decided that the Nepra may work out a mechanism to recover the amounts due on account of pending quarterly tariff adjustment for the period July 2016 to March 2019 & April 2019 to March 2020 by way of determination of separate line item as adjustment in tariff to be recovered prospectively from KE consumers.
However, the Nepra, in its letters of August 28, 2020 and November, 15,2021 has noted that the “subject quarterly adjustments have already been decided in line with the Multi Year Tariff (MYT) of K-Electric and have been intimated to the Federal Government for notification and that no further action was required by the Nepra on the matter. Further, the provision appropriate subsidy over the remaining MYT period of K-Electric or levying surcharge is the domain of the Federal Government.”
In the meanwhile, Nepra has issued two further determinations on March 01, 2022, and March 30, 2022 for notification by Federal Government under 31(7) of NEPRA Act 1997. The Nepra in its March1, 2022 decision revised the tariff approved earlier on March 10, 2021 on a review petition filed by KE under multiyear tariff for the financial years 2017-23.
Keeping in view this determination by Nepra, KE, in its letter of March2, 2022 has shared its revised subsidy requirement of Rs 89 billion. This decision involves an adjustment/funding reduced from Rs 101 billion to Rs 89 billion shared earlier with the ECC in its meeting held on September 21, 2021. The Nepra in its decisions dated March 30, 2022, June 08, 2022and July 22, 2022, covered further three QTAs for the period from April 2020 to December 2020, four QTAs for the period from January 2021 to December 2021 and one QTA for the period from January 2022 to March 2022, respectively.
With these determinations, total adjustment requirement increased from Rs 89 billion to Rs 241 billion. Further, the ECC of the Cabinet on June 22, 2022, approved to utilize available budget of Rs 36.948 billion as advance subsidy in FY-22. Accordingly, the outstanding subsidy requirement declined to Rs. 204 billion.
The Power Division has also submitted that impact of subject MYT in the form of QTAs remained pending owing to various proceedings under adjudication/decision at various forums due to this pendency and the impact of such adjustment under QTAs or MYT was not passed on to the consumers of K-Electric.