Consumers to bear the Rs 120 billion burden

Rs120b burden will be transferred to power consumers

Nepra allows PYA for ex-Wapda Discos

The National Electric Power Regulatory Authority (Nepra) has completed the process of tariff determinations for six Discos and allowed Prior Year Adjustment (PYA) to the ex-WAPDA Discos which will enable them to transfer the burden of Rs 120 billion to the electricity consumers.

The combined impact of the PYA of all the 10 Discos is around Rs180 billion which will be transferred to the consumers of ex-Wapda Discos in their bills.

It is pertinent to mention here that earlier this month NEPRA allowed PYA to four Discos including Islamabad Electric Supply Company (Iesco), Lahore Electric Supply Company (Lesco), Faisalabad Electric Supply Company (Fesco) and Tribal Electric Supply. The remaining six Discos sought PYA against capacity payments, operations and maintenance, use of system charges and transmission and distribution losses other than fuel component. Last week, the regulator heard the request for six Discos from PESCO, HESCO, SEPCO, GEPCO, MEPCO and QESCO. Mepco sought PYA of Rs23.50 billion, Pesco Rs17.839 billion, Hesco Rs15.453 billion, Sepco Rs6.158 billion, Gepco Rs10.464 billion and Qesco Rs9.9 billion.

The prior year adjustments for 2015-16 were notified by the federal government on March 22, 2018. The notified determinations provide mechanism for quarterly adjustments on account of power purchase price.

The additional impact of the prior year adjustment for fiscal year 2017-18 on account of difference in power purchase prices for four quarters was mostly arising out of the additional capacity payments and increased net hydel profit to the provinces. The total impact of hydel profit for all the four quarters of 2017-18 was estimated at about Rs250 billion but since an amount of about Rs70 billion had already been made part of the consumer tariff, the net additional impact would be about Rs180 billion.

Nepra has also determined tariffs of Gepco, Mepco, Pesco, Hesco, Sepco and Qesco for the fiscal year 2015-16 which was intimated to the federal government for notification. The Nepra, considering the fact that fiscal year 2017-18 had already lapsed, had also decided to consider the impact of Prior Year Adjustment (PYA) in these proceedings.

The Nepra determined tariff would increase by about Rs4 per unit from Rs11.50 per unit to about Rs15.45 per unit. It was estimated that effective average power tariff to be paid by the consumers would increase by about Rs2 per unit based on tariff differential subsidy earmarked in the budget.

Pesco requested Nepra to determine company’s PYA separately and delink it from regular tariff so that direct recoveries could be made from consumers saying the petroleum division was already evolving a mechanism for such a dispensation. On the point of delinking the quarterly adjustments from the tariff determinations, the Authority observed that the petitioner (PESCO) did not provide any reasoning/justification to substantiate its request, therefore, the Authority did not accede to the request of the petitioner and decided to include the impact of quarterly adjustments in the Schedule of Tariff (SoT).

By Fawad Yousafzai

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