Power consumers may be burdened with Rs22.56bn

ISLAMABAD: The state-run power distribution companies (Discos) have sought National Electric Power Regulatory Authority (Nepra) approval for transfer of Rs22.56 billion burden to power consumers. This request is on account of quarterly adjustments for the first quarter of the fiscal year 2023-24, spanning from July to September.

Discos cited various factors, including variation in capacity charges, variable operation and maintenance (O&M), additional recovery on incremental sales, use of system charges, market operator fee, and Fuel Cost Adjustment (FCA) impact on transfer and distribution (T&D) losses for the quarter.

Representing the Discos, the Central Power Purchasing Agency (CPPA) has submitted a formal petition to the power regulator.

Normally, the amount is recovered in three months; however, the final decision rests with the authority. A public hearing on the petition is scheduled for November 14. If the authority approves this positive adjustment, it will apply to all Discos customers, except lifeline customers.

Out of the total additional amount of Rs22.56 billion, Discos asks for permission to collect Rs12.126 billion from its clients as capacity charges. This will be allocated to Independent Power Producers (IPPs) to cover the cost of electricity that Discos did not inject into the national demand due to system constraints or low electricity requirements.

In addition, the consumers will also pay Rs4.617 billion as variable O&M costs, Rs6.617 billion for T&D losses on monthly FCA, and Rs10.247 billion for use of system charges and market operator fee.

It is to be noted that as per the decision of the authority on November 3, 2021, regarding the motion filed by the federal government with respect to the winter incentive package for the consumers on incremental consumption of Discos & K-Electric also decided, “No quarterly adjustments would be applicable on incremental consumption.” The impact of incremental units for the quarter has been worked out at a negative Rs11.047 billion. It is the cost of units purchased for the industrial incremental sale. The data shared with Nepra indicates that IESCO demanded recovery of Rs5.542 billion, Lesco Rs10.308 billion, Fesco Rs4.189 billion, Pesco Rs2.096 billion, Tesco Rs1.195 billion, Hesco Rs1.056 billion, Sepco Rs926 million. Mepco and Qesco have shown savings of Rs520 million and Rs2.625 billion respectively.

Discos’ inefficiencies, power losses, and theft in systems would be recovered from the consumers in form of the recoveries.