Pesco resents ‘excessive’ supplemental charges by CPPA-G


ISLAMABAD: Peshawar Electric Supply Company (PESCO), one of the worst performing Discos, has reportedly protested with CPPA-G on charging of unbridled supplemental charges from it in violation of NEPRA determination.

Chief Executive Officer (CEO) PESCO, in a letter informed CEO CPPA-G that his organisation has charged supplemental charges amounting to Rs. 4.306 billion to PESCO for the month of Oct-2023 as conveyed by the Additional Manager Finance (Billing) CPPA-G on November 15, 2023 .

The cumulative amount charged by CPPA-G to PESCO on account of supplemental charges stood at Rs. 133.061 billion for the period up to Oct-2023.

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PESCO has also apprised that as per its Board Resolution and despite repeated requests, the CPPA-G has not provided with the party-wise details of the supplemental charges charged to PESCO. However, in the letter it was conveyed that the supplemental charges are allocated on the basis of “Month-end Payables”.

The distribution company has emphasised that any amount charged to it on account of power purchase is regulated under NEPRA rules & regulation and any such decision may be viewed in terms of said rules. Moreover, NEPRA has not allowed the supplemental charges in various determinations of PESCO rather during hearing of PESCO Tariff Petition for FY2015-16, NEPRA advised CPPA-G to file a separate petition for supplemental charges of the whole sector.

The Disco maintained that subsidy is part of price and its non-payment/ late payment by the GoP is totally dependent upon the Finance Division and the GoP budgetary provision. PESCO dispatches its monthly subsidy claims on timely basis and despite the fact that these claims have been verified, still Rs.27.623 billion (up to Oct-23) is receivable on account of subsidy from the government of Pakistan.

Moreover, in current scenario of Inter Disco Tariff Rationalisation (IDTR), the due credit on account of IDTR also impacts the payment position resulting in overstatement of payables of certain Discos and understatement of the remaining Discos; hence the basis of allocating supplemental charges without adjustment of AJK subsidy, TDS & IDTR needs reconsideration.

As per Board resolution, PESCO has already requested to consider subsidy and AJ&K receivables in calculation of the supplemental charges, as these are part of the cost and its due credit of outstanding amount may be allowed to PESCO as the onus of delay in payment of subsidy and AJ&K receivables is not on PESCO.

The Disco emphasised further that the CPPA-G has issued cumulative invoices of power purchase and supplemental charges to PESCO (including those pertaining to TESCO) for period up to FY 2014-15; accordingly, the supplemental charges may be revised, to segregate the TESCO share separately.

After bringing actual picture into the notice of CEO CPPA-G, PESCO, has also shared the detailed working of supplemental charges and stressed that the statement is prepared for the sake of understanding only and PESCO stance for booking of the supplemental charges is still dependent on the determination of the said cost by NEPRA as the Authority has already directed CPPA-G during PESCO Tariff Petition hearing of FY 2015-16 to file a separate petition for supplemental charges.

“Although, NEPRA has allowed offsetting the supplemental charges against the late payment charges recovered from consumers, it is not enough to cover the said charges,” said CEO PESCO.

The Company’s “collection” of supplemental charges is only Rs. 15.981 billion, against Rs. 107.430 billion billed by CPPA-G for the period FY 2014-15 to FY 2023-24 (up to Oct-23).

PESCO has requested CEO CPPA-G that complete detail of supplemental charges being charged/ allocated to it may please be provided along with party-wise break-up of the amount recorded by CPPA-G on account of supplemental charges/ interest charges/ mark-up payable/ paid to power producers/ generators.

Furthermore, PESCO has once again requested to revise the criteria for allocation of supplemental charges by adjusting the amount receivables from GoP on account of subsidy/ supplies to AJ&K/ TESCO share and revised calculations along with details of the charges may be shared with the company as per resolution of its BOD.

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