Nepra approves multi-year tariffs for 3 Discos

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved Multi-Year Tariffs (MYTs) spanning five years for three significant power distribution companies (Discos) including Islamabad Electric Supply Company (Iesco), Lahore Electric Power Company (Lesco) and Faisalabad Electric Supply Company (Fesco).

During the fiscal period from 2023-24 to 2027-28, Nepra has evaluated the revenue requirements for each company. The Iesco’s revenue requirement for FY2023-24 stands at Rs39.66 billion, Lesco’s at Rs60.459 billion and Fesco’s at Rs 44.490 billion. These assessments encompass the costs associated with the distribution function of each company, indicating the necessary funds for maintaining and enhancing the distribution infrastructure.

Furthermore, Nepra has approved differential amounts for each Disco as part of the Prior Year Adjustment (PYA) in the subsequent adjustment/indexation determination for FY2024-25. Iesco is allocated a differential amount of Rs7.426 billion, Lesco Rs7.735 billion and Fesco Rs11.900 billion for FY2024-25.

Nepra has communicated the decision to the federal government for a notification in the official gazette under Section 31(7) of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997, within 30 days of this notification. If the federal government does not notify the tariff decision or refer the matter to the authority for reconsideration within the timeframe specified in Section 31(7), the authority will notify the decision in the official gazette under Section 31(7) of the NEPRA Act.

Nepra has emphasized the importance of organizational restructuring within these companies. It noted although the petitioners had segregated costs into distribution and supply of power functions, they had submitted combined accounts for both functions without showing progress in organizational restructuring. Nepra considers this restructuring crucial for enhancing performance and ensuring transparency.

This decision to approve MYTs aligns with Nepra’s commitment to balancing the interests of consumers and electric power service providers, adhering to principles of transparency and impartiality outlined in Section 7(6) of the Nepra Act.

The differential amount of Rs7.426 billion for distribution function shall be allowed to Iesco as part of PYA in the subsequent adjustment/indexation determination of the petitioner for FY2024-25.

MYT for Lesco covering the period from FY2023-24 to FY2027-28 has been finalized.

Nepra’s assessment has determined a revenue requirement of Rs60.459 billion for Lesco’s distribution function in FY 2023-24. Consequently, a differential amount of Rs7.735 billion will be permitted as part of the PYA during the subsequent adjustment/indexation determination for the Lesco in FY2024-25.

Similarly, MYT for Fesco spanning from FY2023-24 to FY2027-28 has been established.

Nepra’s evaluation has determined a revenue requirement of Rs44.49 billion for Fesco’s distribution function in FY2023-24. Consequently, a differential amount of Rs11.9 billion will be permitted as part of the PYA during the subsequent adjustment/indexation determination for the Fesco in FY2024-25.