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Monday December 05, 2022

Nepra allows Discos to collect additional Rs1.65 per unit

In real terms, the incremental increase is only 3 paisa which will have an impact of Rs 3 billion for the entire year.

October 05, 2021
File photo
File photo

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) on Monday revised the quarterly adjustments of the power cost for consumers by Rs 0.03/unit to Rs 1.65 for 2021/22 against Rs 1.62 of last year.

The last year’s Rs 1.62/unit upward adjustment has already expired at end-September 2021. Now the new adjustment will be at Rs 1.65 billion for next one year effective from October 2021 and will be applicable to those who are consuming more than 300 units/month. During this one year, the DISCOs will collect Rs 173 billion from power consumers.

The NEPRA spokesman told The News last year’s adjustment of Rs 1.62/unit has already expired and this Rs 1.65/unit for the next one year shall be implemented. In real terms, the incremental increase is only 3 paisa which will have an impact of Rs 3 billion for the entire year.

For the fourth quarter of 2019/20, the authority has determined and allowed the DISCOs to collect additional Rs 0.8276/unit and for the first and second quarters of 2020-21, it sanctioned the combined collection of Rs 0.8966/unit. However, for the third quarter of 2020-21, the regulator asked the DISCOs to refund Rs 0.0673 per unit to power consumers.

The NEPRA, in a statement said: “Earlier, quarterly adjustments of Rs 1.62 per unit expired on September 30, 2021 and were replaced by Rs 1.65 per unit. So the net increase is Paisa 3 per unit. Under the tariff mechanism, changes in fuel cost are passed on to consumers on a monthly basis through automatic mechanism while QTAs on account of variation in power purchase price (PPP), capacity charges, variable operation and maintenance costs, use of system charges and impact of transmission and distribution losses are built in the base tariff by the federal government on the basis of the NEPRA determination.

“The authority determined quarterly adjustments of XWDISCOs for the 4th quarter of FY 2019-20 vide a decision dated February 10, 2021, with a uniform rate of Rs 0.8276/kWh and the same was intimated to the federal government for notification in the official gazette. Subsequently, the authority determined quarterly adjustments for the 1st & 2nd quarters of FY 2020-21 vide a decision dated May 6, 2021, with a uniform rate of Rs 0.8966 per unit.

It is pertinent to mention here that the authority had already determined quarterly adjustments of XWDISCOs for the 2nd & 3rd quarters of FY 2020-21 with a uniform rate of Rs 1.6236 per unit. The federal government notified the said periodic adjustments which were to remain effective till September 2021. The federal government in view of the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Ordinance 2021 filed Reconsideration Request dated May 21, 2021, against the decisions of the authority i.e. 10.02.2021 and 06.05.20201. The federal government in its request submitted that the National Power Policy 2013 developed by the federal government and approved by the Council of Common Interests on July 31, 2013 is in vogue and, inter alia, stipulates that the low-end consumers will be protected from any price escalation and tariff rationalization will be done.

In addition, the federal government submitted that in terms of the provisions of the act, as amended through Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Ordinance 2021, periodic quarterly adjustments are to be made by the authority, inter alia, in line with the policy guidelines of the federal government. Furthermore, as per the provision of the recently-added Section 31(8) of the NEPRA Act, the federal government has been empowered to impose surcharges for the purposes stipulated therein. In view of the above-mentioned discussions, considering the submissions made by the MoE in its request and during the hearing and keeping in view the interest of consumers, the authority accepts the request of’ the federal government that the effectiveness of the recommended periodic adjustments for the 1st & 2nd quarters of FY 2020-21 be made effective from October 2021 i.e. after the lapse of the existing quarterly adjustments i.e. September 30, 2021. Accordingly, the quarterly adjustments for 1st & 2nd quarters of FY 2020-21, determined by the authority vide a decision dated 06.05.2021 would be applicable w.e.f. October 1, 2021 and would remain applicable till September 30, 2022.

Regarding quarterly adjustment for the 4th quarter of FY 2019-20, the authority believes that since it will be in the interest of the consumers, therefore, the authority has no objection if the federal government desires to make it effective from October 2021.

Here it is pertinent to mention that the deferment of quarterly adjustments to be made applicable from October 1, 2020 is purely being done on the request of the federal government, therefore, any financial impact arising out on account of delayed application of the determined quarterly adjustments would not be allowed to be passed on to consumers and would be borne by the federal government itself.

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