Fuel charges adjustment: Power consumers to pay extra Re0.517 a unit for three months

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has allowed power distribution companies to increase their tariff by Re0.517 per unit on account of fuel charges adjustment for three consecutive months starting from August.

The ex-Wapda distribution companies (XWDCOs) will collect an additional Rs14.3 billion from power consumers as adjustment for the first quarter (July-Sept 2021-22). The raise in the tariff will not affect lifeline consumers (using less than 100 units a month) and incremental industrial sales for Industrial Support Package.

It is noted that quarterly adjustments would not be passed on to B1, B2, B3, and B4 industrial consumers to the extent of incremental sales till the continuation of the instant package, according to the NEPRA’s earlier decision dated Dec 1, 2020.

These adjustments are based on the power purchase price, including the impact of transmission and distribution (T&D) losses and others for the quarter.

Notably, the International Monetary Fund's (IMF) is demanding from the government to withdraw all the subsidies it is extending to consumers. The donor agency has also placed the condition for the revival of the program.

The recent electricity tariff was raised after NEPRA conducted a public hearing on the petitions on February 23, 2022. It was observed that XWIDSCOs have used different methodologies in their revised quarterly adjustments to calculate the impact of incremental sales. XWDISCOs also included the effect of incremental sales for the previous period (November 2020 to onward) in their instant quarterly adjustment request.

It was further decided that no quarterly tariff adjustments (QTAs) would be passed on to the extent of incremental sales till the continuation of the instant package, as the capacity charges would be actualised from the previous level of the corresponding month’s sales.

Given the submissions of CPPA-G and the decision of the Authority dated Dec 1, 2020, the NEPRA has decided to work out the quarterly adjustment based on net units. The units purchased for incremental sales have not been included while working out the quarterly adjustments. Accordingly, the cost recovered on incremental units over and above the fuel cost adjusted from the quarterly adjustments worked out based on net units.