Power Consumers to Face Rs 8.7b Burden in Electricity Bills

Staff Report:

Power Distribution Companies (DISCOs) have requested the National Electric Power Regulatory Authority (NEPRA) to approve a power price hike, which, if approved, would impose an additional burden of Rs 8.71 billion on electricity consumers nationwide.

This request submitted with NEPRA by Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO), Islamabad Electric Supply Company (IESCO), Lahore Electric Supply Company (LESCO),Multan Electric Power Company(MEPCO),Peshawar Electric Supply Company (PESCO),Quetta Electric Supply Company (QESCO), Sukkur Electric Supply Company (SEPCO), and Tribal Areas Electricity Supply Company (TESCO), related to the first quarterly adjustment of the current fiscal year, is set for hearing on November 20.

According to details, the proposal from the DISCOs includes various charges aimed at covering operational and maintenance costs. NEPRA documents outline the key areas for which the additional funds are being requested, specifying Rs 8.06 billion for capacity charges, which compensate power plants for maintaining availability, even if not actively generating. Another Rs 1.25 billion is requested for operations and maintenance costs, essential for managing infrastructure upkeep, ensuring reliability, and maintaining the network.Nepra Raises Power Tariff for KE Consumers

In addition, the proposal includes Rs 1.65 billion for system charges and market operations fees (UoSC &MoF). These cover the costs associated with the operation of the grid system and market activities, including administrative and logistical expenses required to keep the power supply chain functional. Together, these costs contribute to the overall financial requirements for maintaining grid stability and supporting the operations of the power distribution companies.

Interestingly, the documents also mention a saving of approximately Rs 2.25 billion, achieved by minimizing transmission and distribution losses. This saving, resulting from improved efficiency in the power network, represents an effort to counterbalance some of the increased costs and reduce the total burden on consumers.

The NEPRA hearing, scheduled for November 20, will review the distribution companies’ request in detail. If approved, the increase will not only impact customers across the country but also extend to consumers of K-Electric, who will experience a similar adjustment in their bills. This adjustment, if enacted, could affect household budgets nationwide as it directly translates into higher monthly bills for electricity users.

Pursuant to the notified tariff, the DISCOs have filed their requests for adjustments on account of capacity charges, transmission charges & market operator fee, the impact of incremental units and impact of T&D losses on FCA and variable operation & maintenance charges for the 1st quarter of financial year (FY) 2024-25 i-e July to September 2024, in line with the notified mechanism in this regard.