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Monday June 17, 2024

Discos petition Nepra for Rs51.88bn recovery from consumers

Once Nepra determines additional charges per unit for Discos, same will be applied to K-Electric as well

By Israr Khan
May 08, 2024
Nepra sign seen on its head office in this undated photo. — APP/File
Nepra sign seen on its head office in this undated photo. — APP/File

ISLAMABAD: The state-owned power distribution companies (Discos) have formally petitioned the National Electric Power Regulatory Authority (Nepra) to recover Rs51.88 billion from consumers.

The sought-after recovery is related to various adjustments for the third quarter of the fiscal year 2023-24, covering January to March 2024.

A significant portion of this recovery, amounting to 60.4 percent or Rs31.35 billion, constitutes capacity charges from power consumers to be disbursed to private power generators.

Once Nepra determines the additional charges per unit for Discos, the same will be applied to K-Electric as well.

In adherence to policy guidelines issued by the federal government for the uniform application of quarterly adjustments, this third quarterly tariff adjustment (QTA) for FY2023-24, to be determined by Nepra, will also affect K-Electric customers.

Nepra has scheduled a public hearing on the petition for May 17, 2024. Discos, in their petition, have requested an increase in power costs, citing capacity charges, transmission charges, market operation fees, and other variable operation and maintenance charges for the quarter.

According to the petition, Islamabad Electric Company (Iesco) seeks an additional adjustment of Rs8.17 billion, Lahore Electric Supply Company (Lesco) Rs3.94 billion, Faisalabad Electric Supply Company (Fesco) Rs9.318 billion, Multan Electric Company (Mepco) Rs3.62 billion, Peshawar Electric Supply Company (Pesco) Rs14.717 billion, Hyderabad Electric Supply Company (Hesco) Rs5.413 billion, Quetta Electric Supply Company (Qesco) Rs5.389 billion, and Sukkur Electric Power Company (Sepco) Rs2.773 billion.

Meanwhile, two public utilities, Gujranwala Electric Power Company (Gepco) and Tribal Electric Supply Company (Tesco), are expected to return Rs899 million and Rs562 million, respectively, to their clients.

Of the total Rs51.88 billion sought for recovery, Discos aim to include Rs31.35 billion for capacity charges, Rs2.58 billion for the use of system charge (UoSC) and market operator fee (MOF), and a positive adjustment of Rs5.57 billion for variable operation and maintenance (O&M) charges.

Consumers face an additional burden from multiple taxes on these charges, with the 18 percent GST alone amounting to an extra burden of Rs9.33 billion on power consumers.

It’s noteworthy that by the end of March 2024, NEPRA had approved Rs85.275 billion for the second quarter (Oct-Dec FY 2023-24), with a uniform impact of Rs2.7492/kWh. This amount is being collected from April to June 2024.

Previously, the first QTA adjustment for FY 2023-24, with a uniform applicable rate of Rs1.1502/kWh, was collected in three months and expired by March 2024.