ISLAMABAD: The Nati­onal Electric Power Regu­latory Authority (Nepra) on Tuesday allowed ex-Wapda Distribution Companies (Discos) to charge Rs3.39 per unit to their consumers to mop up Rs95 billion in additional funds under the quarterly tariff adjustment (QTA) mechanism.

At a public hearing presided over by Nepra Chairman Tauseef H. Farooqui and attended by members Rafique Shaikh and Maqsood Anwar Khan, the regulator took up separate requests by 10 Discos seeking a combined additional QTA of Rs3.69 per unit for the fourth quarter (April – June) of fiscal year 2021-22.

The increase was sought on account of capacity charges, transmission char­ges, market operator fee, the impact of transmission and distribution losses on fuel cost adjustments and variable operation and maintenance charges for the fourth quarter, including impact of additional recovery on incremental sales.

The regulator allowed Rs3.39 tariff increase sought by the power companies and decided that this should be implemented with effect from Oct 1 so that an ongoing QTA of Rs3.21 per unit for the third quarter (January – March) comes to an end and is replaced by the new QTA. This would result in delayed recovery for Discos, but the consumer would feel an additional financial burden of just 18 paise per unit. The new QTA of Rs3.39 per unit would remain in place for three months _ from October to December.

The Nepra would formally notify its decision in a couple of days, but said the QTA would be applicable to all consumers of Discos, except those in the lifeline category. The subscribers of Karachi Electric will also be charged the national uniform tariff with application of Discos rate, although the KE’s QTA petition for over Rs14 per unit was cleared last week. It is usually adjusted against tariff differential subsidy provided through the federal budget.

The quarterly adjustment of about Rs95bn included an amount of about Rs55bn under capacity charges and about Rs35bn on account of impact of transmission and distribution losses on monthly FCAs and Rs14bn for use of system charges and market operator fee.

Reduction sought

On the other hand, reduction was sought on account of Rs8.3bn for impact of discounted rate on incremental sales and about Rs1.5bn under variable operation and maintenance cost _ thus a net addition of Rs95bn.

The demand for the highest quarterly adjustment _ Rs19.5bn_ came from Multan Electric Power Company (Mepco), followed by Rs17.8bn from Lahore Electric Supply Company, Rs12.274bn from Peshawar Electric Supply Company and Rs11.6bn from Faisalabad Electric Supply Company.

Gujranwala Electric Power Company’s QTA stood at Rs9.23bn, followed by Islamabad Electric Supply Company with Rs8.7bn, Hyderabad Electric Supply Company Rs5.3bn, Tribal Electric Supply Company Rs3.7bn, Quetta Electric Supply Company Rs3.2bn and Sukkur Electric Supply Company Rs2.99bn.

Under the tariff mechanism, changes in fuel cost are passed on to consumers only on monthly basis through automatic mechanism, while quarterly tariff adjustments on account of variation in power purchase price, capacity charges, variable operation and maintenance costs, use of system charges and including impact of transmission and distribution losses are built in the base tariff by the federal government.

Published in Dawn, September 7th, 2022