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Friday June 21, 2024

State-run Discos seek $9.9bn in power rate adjustments for 2024-25

The NEPRA will hold public hearings on these petitions on April 2 and 3, 2024

By Israr Khan
March 26, 2024
The National Electric Power Regulatory Authority (Nepra) headquarters can be seen in this picture released on November 4, 2021. — Facebook/NEPRA
The National Electric Power Regulatory Authority (Nepra) headquarters can be seen in this picture released on November 4, 2021. — Facebook/NEPRA

ISLAMABAD: Pakistan’s ten state-run power distribution companies (Discos) have formally requested approval from the National Electric Power Regulatory Authority (NEPRA) for an annual adjustment or indexation of distribution/supply margin totaling Rs2.763 trillion (equivalent to $9.9 billion) for the fiscal year 2024-25.

The request, submitted by the utilities, encompasses comprehensive calculations considering inflation, exchange rates, fuel prices, and operation and maintenance (O&M) costs. Additionally, it incorporates Prior Year Adjustments (PYA) for the fiscal 2022-23, along with outstanding amounts from previous years and associated expenses.

These companies have submitted their respective revenue requests to the National Electric Power Regulatory Authority (NEPRA) for the fiscal 2024-25 under the Multi-Year Tariff (MYT) regime. The NEPRA will hold public hearings on these petitions on April 2 and 3, 2024.

Lahore Electric Supply Company (Lesco) has sought a total revenue requirement of Rs852.05 billion, with allocations including Rs470.16 billion for capacity charges, Rs259.578 billion for energy charges, Rs75.06 billion for operation and maintenance (O&M) costs, Rs35.2 billion for ‘Use of system charge (UoSC)’ and market operator fee (MOF), Rs33.1 billion for salaries, wages, and benefits, Rs8.9 billion for new hiring, Rs6.647 billion for depreciation cost, and Rs4.3 billion for prior year adjustments.

Faisalabad Electric Supply Company (Fesco) has requested Rs501.48 billion, comprising Rs225.3 billion for capacity charges, Rs179 billion for energy cost, Rs42.1 billion for O&M charges, Rs22.6 billion for UoSC/MoF, Rs22.15 billion for salaries, wages, and other benefits, Rs18.08 billion for prior year adjustments, and Rs7.82 billion for depreciation.

Islamabad Electric Supply Company (Iesco) has petitioned for Rs400.48 billion, with allocations including Rs177.2 billion for capacity charges, Rs136.44 billion for energy purchase prices, Rs29.1 billion for O&M, Rs27.6 billion for prior year adjustments, Rs18.2 billion for pay and allowances, Rs12 billion for UoSC/MoF, and Rs6.557 billion for depreciation cost.

Hyderabad Electric Supply Company (Hesco) requested Rs41.88 billion with allocations including Rs8.9 billion for pay and allowances, Rs4.3 billion for post-retirement benefits, Rs9.7 billion for prior year adjustments and Rs2.35 billion for O&M costs. Notably, last week, six other Discos submitted their petitions, collectively seeking Rs967 billion for the fiscal year 2024-25.

Among these six Discos, the Gujranwala Electric Power Company (Gepco) has requested a total revenue requirement of Rs376.2 billion. This includes allocations of Rs15.5 billion for salaries, Rs13.1 billion for post-retirement benefits, Rs47.8 billion for gross margins, Rs43 billion for net margins, and Rs19.1 billion for prior-year adjustments.

Similarly, the Multan Electric Power Company (Mepco) has sought a revenue requirement of Rs160.8 billion. Allocations include Rs21 billion for pay and allowances, Rs24.2 billion for post-retirement benefits, Rs78.3 billion for gross margins, and Rs72.28 billion for net margins for the fiscal year 2024-25. Additionally, it has claimed prior year adjustments of Rs88.54 billion and depreciation of Rs7 billion. The Quetta Electric Supply Company (Qesco) is seeking Rs236 billion in revenue requirements, including Rs193 billion for the power purchase price, Rs13.9 billion for prior-year adjustments, and allocations of Rs9.1 billion for pay and allowances, and Rs2.69 billion for post-retirement benefits.

The Tribal Electric Supply Company (Tesco) aims for a regulator-approved revenue requirement of Rs92 billion, encompassing pay and allowances, post-retirement benefits, gross margins, net margins, wheeling charges, and prior-year adjustments.

The Peshawar Electric Supply Company (Pesco) has requested Rs67.2 billion in revenue requirements, covering pay and allowances, post-retirement benefits, gross margins, net margins, and prior-year adjustments.

Similarly, the Sukkur Electric Power Company (Sepco) is seeking a revenue requirement of Rs35.7 billion, which includes costs for operation and maintenance, depreciation, gross margins, net margins, and prior-year adjustments.