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Monday May 20, 2024

Up to Rs6.51 per unit hike in power purchase price sought

Government has submitted a petition with NEPRA seeking an increase in power purchase price (PPP) by up to Rs27.11 per unit

By Khalid Mustafa
May 16, 2024
A view of Nepras buildings in Islamabad. — Nepra/File
A view of Nepra's buildings in Islamabad. — Nepra/File

ISLAMABAD: The government has submitted a petition with NEPRA seeking an increase in power purchase price (PPP) by up to Rs27.11 per unit from the existing Rs20.60 per unit, showing a massive hike in electricity generation cost by Rs6.51 per unit for determining the base tariff for the financial year 2024-25.

NEPRA will determine the base tariff for the next financial year to be effective from July 1, as per the diktat of IMF. The IMF mission is currently visiting Pakistan and is in talks with the government functionaries for a $6-8 billion loan program. Relevant officials in the Energy Ministry said that the base tariff for the financial year 2024-25 may surge to Rs36.28 per unit from the existing base tariff of Rs29.78, which was at Rs24.82 per unit in 2022-23 in case distribution margin and prior year adjustments are added. Also, the end consumer tariff during peak hours for domestic consumers will go up to Rs48.51 per unit from over Rs42 per unit if the admissible losses of 11 percent of DISCOs, surcharges, taxes and duties are added up in the bills.

As per the CPPA petition, the DISCOs are projected to purchase 130.876 billion electricity units at the cost of Rs3.589 trillion during the next fiscal year at a PPP of Rs27.11 per unit and Rs3.3 trillion at a PPP of Rs25.03 per unit.

The capacity payments for the Financial Year 2024-25 are also projected to surge up to Rs2.278 trillion mainly because the 1,002 MW of the three projects would be added in 2024. The 870 MW Sukhi Kinari Hydro Project will come on stream on November 30, 2024, the 100 MW Zorlu Solar Power project will come into the system on October 11, 2024, while the 32 MW Shahtaj Sugar Mill Limited will be operational on August 11, 2024. The Rs2.278 trillion capacity payments will contribute to Rs17.42 in one unit of electricity.

However, the existing capacity payments stand at Rs1.9 trillion which the end consumers pay as Rs14.09 in one unit in the electricity tariff.