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Wednesday April 17, 2024

Consumers likely to face power bill surge as Nepra mulls over tariff hike

Nepra has reserved its judgment on the Discos’ petitions and will issue its decision after a thorough review

By Israr Khan
April 04, 2024
A FESCO worker fixes a line on an electric pole on December 19, 2022. — APP
A FESCO worker fixes a line on an electric pole on December 19, 2022. — APP

ISLAMABAD: Power consumers in Pakistan are bracing for a potential surge in their electricity bills as the National Electric Power Regulatory Authority (Nepra) mulls over a proposed up to 20 percent increase in the distribution margin for ex-Wapda power distribution companies (XWDiscos) for the fiscal year 2024-25.

Nepra on Wednesday concluded a two-day hearing on the revenue requirement petitions submitted by all 10 XWDiscos, totaling Rs2.763 trillion for the upcoming financial year.

These companies are seeking Nepra’s approval for a revenue requirement of Rs2.763 trillion, inclusive of Prior Year Adjustments (PYA) for fiscal year 2022-23, outstanding amounts from previous years and other associated costs. The proposed increase in the distribution margin will be incorporated into the electricity base tariff for FY2024-25.

However, Nepra has reserved its judgment on the Discos’ petitions and will issue its decision after a thorough review.

During the hearings, Nepra expressed dissatisfaction with the performance of Discos, particularly singling out Islamabad Electric Supply Company (Iesco) over a high number of fatal accidents.

Rafiq Shaikh, a member of Nepra, noted that Iesco had the highest incidence of fatal accidents among the Discos and highlighted issues such as a backlog of 450 pending connections for over a year and a shortage of 9,000 employees. Shaikh emphasized that while Iesco attributed these problems to a lack of manpower, such issues were not exclusive to Iesco but were prevalent across all Discos.

Additionally, Nepra criticized Lahore Electric Supply Company (Lesco), Faisalabad Electric Supply Company (Fesco) and others for seeking substantial revenue requirements for the next fiscal year. Lesco aimed for Rs852.05 billion, Fesco for Rs501.48 billion, Iesco for Rs400.48 billion and others similarly presented their requests.

The regulatory body urged the Discos to address their operational shortcomings and ensure better safety measures to avoid fatal accidents, emphasizing that such issues were unacceptable, especially for companies like Iesco, which operates in the federal capital with an underground system.

Notably, the Peshawar Electric Supply Company (Pesco) requested Rs67.2 billion in revenue requirements, while the Sukkur Electric Power Company (Sepco) sought Rs35.7 billion.

Nepra’s decision on the proposed tariff hikes and revenue requirements will significantly impact consumers and the energy landscape in Pakistan for the upcoming fiscal year.