Nepra Increases Power Tariff by Rs 1.75 Per Unit

Staff Report:
The National Electric Power Regulatory Authority (Nepra) has allowed XWDiscos and K-Electric to collect an additional Rs1.75 per unit from electricity consumers in next three months (Sept to Nov 2024).

This potential increase is aimed at recouping Rs43.23 billion through quarterly tariff adjustments for the fourth quarter of 2023-24, which covers the period from April to June 2024.
During a public hearing on 26 August led by Nepra Chairman Waseem Mukhtar, Discos submitted that adjustments were largely result of lack of sales as compared to the projections during the instant quarter.

However, NEPRA observed that certain DISCOs, such as PESCO, failed to draw energy as per its demand, and opted to carry out load shedding in its service area. While this reduced their share of capacity charges from overall pool, it also contributed to lower sales. These companies had sought for Rs1.9/unit additional collection.

CPPA as an agent of the DISCOs engaged in Local & International legal proceedings had requested to allow Rs51 million on account of Legal charges in the instant quarterly adjustment, but the authority turned it down. The authority noted that since such costs are included in Market Operation Fee (MoF), and for it the authority had already approve Rs500 million on account of legal charges as part of CPPA MoF for the FY 2023-24.

CPPA in its plant wise data has also included an amount of Rs72.23 million on account of KAPCO charges on account of Tax differential for the period from 01 Jul to 24 Oct 2022. But the authority did not consider the amount claimed for KAPCO.

The Authority has also adjusted an amount of Rs.73.18 million charged by CPPA-G to DISCOs on account of PPIB fee as part of PMLTC invoice for January 2024. The matter of PPIB is under consideration of the Authority through separate proceedings, therefore, the matter would be decided once those proceedings are concluded.

Authority determined a positive adjustment of Rs43.23 billion on account of variation in Capacity charges, Variable O&M, additional recovery on Incremental sales, Use of System Charges, Market Operator Fee and FCA impact on T&D losses for the 4th quarter of PY 2023-24.

The Authority has decided to allow positive quarterly adjustments of Rs.43.23 billion pertaining to the 4th quarter of the FY2023-24, in a period of three months i.e. September to November 2024, at a uniform rate of Rsl.7432/unit, to be applicable to all consumer categories, except lifeline consumers.

In another decision, NEPRA directed DISCOs to refund Rs0.3692/unit to its clients in their September bills on account of monthly Fuel Charges Adjustment (FCA) for July 2024.

This FCA refund will be applicable to all the consumer categories except lifeline consumers, domestic consumers consuming up-to 300 units, Electric Vehicle Charging Stations (EVCS), Pre-paid electricity consumers of all categories who opted for pre-paid tariff and agriculture Consumers of all the XWDISCOs. The decision also clarified that negative adjustment on account of monthly FCA is also applicable to the domestic consumers having Time of Use (ToU) meters irrespective of their consumption level.