ISLAMABAD: Power distribution companies (Discos), while still reeling under the prolonged application of two simultaneous quarterly adjustments of about Rs160 billion (Rs4.43 per unit), have come up with a fresh claim of another Rs82bn for the second quarter (October-December) of this fiscal year to be charged to consumers at the rate of about Rs4.5 per unit for three months.

The requests from these firms have come amid a prevailing inflation rate of 30 per cent, suggesting that official estimates of declining inflationary trends might be less forthcoming because electricity and gas rates have a major contribution to the price baskets.

Besides, the State Bank of Pakistan (SBP) has kept its policy rate unchanged at a record 22pc, citing frequent energy price hikes that keep inflation at elevated levels.

In their separate tariff petitions, the Discos have sought to raise about Rs81.5bn from their consumers in three coming months under the quarterly tariff adjustment (QTA) for the October-December 2023 period.

Adjustment for Oct-Dec quarter comes in at Rs4.5 per unit

This is also on top of about a Rs6.5 per unit monthly fuel cost increase for the billing month of February that currently awaits a decision by the National Electric Power Regulatory Authority (Nepra).

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The regulator has accepted the respective tariff petitions and has called public hearings on Feb 14 to see if the proposed increase in tariff is justified in line with the quarterly tariff adjustment mechanism. The quarterly adjustments for Discos now also apply to K-Electric consumers as well under recent government and regulator decisions.

The Discos have sought the increase to finance the additional financial impact of capacity charges arising out of currency devaluation and the interest rate hike besides the market operator fee, the impact of transmission and distribution losses on fuel cost adjustments, the cost of incremental consumption and variable operation and maintenance charges for the second quarter of the current fiscal year.

At present, the consumers are paying about Rs3.28 per unit QTA for the fourth quarter of the last fiscal year that would remain applicable for six months — from October 2023 to March 2024 — to mop up more than Rs200bn from power consumers across the country, including those of K-Electric.

Another QTA for July-September 2023 is also being charged to consumers at the rate of Rs1.15 per unit for the billing period of January to March 2024 to raise another Rs22.3bn.

Under the petitions, the Disco from Lahore has demanded the highest claim of Rs15.1bn, followed by Rs14.9bn by Multan Electric, Rs11.6bn by Peshawar Electric and Rs11bn by Quetta Electric.

These are followed by a Rs9.45bn claim filed by Faisalabad Electric, Rs6.92bn by Islamabad Electric, Rs3.5bn by Hyderabad Electric, Rs3.5bn by Tribal Electric, Rs2.9bn by Sukkur Electric and Rs2.7bn by Gujranwala Electric.

The biggest chunk of additional cumulative burden on account of capacity charges has been claimed by Discos at Rs75bn for the quarter, followed by Rs10.8bn on account of the uncovered impact of transmission and distribution losses and Rs6.6bn on account of the use of service charges and market operator fee.

On the other hand, Discos have offered Rs8.7bn worth of negative variable operation and maintenance charges and Rs2.34bn worth of impact of incremental sales, thus working out a cumulative net additional demand of Rs81.5bn. On approval, the adjustment would be recovered on a uniform basis from all consumers except for lifeline users.

Published in Dawn, January 31st, 2024