Nepra increases power tariff by Rs1.52 per unit

  • Tariff determination had been made to ensure the financial viability of the power sector: Nepra

KARACHI – The National Electric Power Regulatory Authority (Nepra) has approved Rs1.52 per unit average increase in the base tariff for consumers.

The decision made on Tuesday would affect all consumers of ex-Wapda distribution companies (Discos) as the base tariff would go up by an average Rs2 per unit including a 48-paisa per unit increase already determined by the regulator last month.

Nepra issued 10 separate tariff determinations for respective Discos and forwarded to the government for an advice on an increase in tariff separately depending on the element of subsidy and uniform tariff methodology.

The regulator said it was re-determining the government request on the directions of the Islamabad High Court where the regulator’s determinations for 2015-16 to 2019-20 tariff had been challenged.

‘The tariff determination had been made to ensure the financial viability of the power sector which otherwise would result in huge prior year adjustments and would not be in the interest of the consumers’ it said in a statement.

According to the power regulator, the period for the fiscal year 2015-16 for which the tariff was being re-determined had already passed so it was decided to include the impact of over/under-recovery on account of power purchase price, distribution margins and prior year adjustments in the consumer tariff for upcoming years.

The regulator also clarified that variations on account of power purchase price including losses for 2016-17 had not been recovered or passed on to the consumers as the government took no action on the request of the regulator.

The consumers would face the burden because of payables to the Khyber Pakhtunkhwa government on account of net hydel profit and its arrears under an agreement between the federal and provincial governments.

A Nepra official said the resultant increase in tariff was worked out on the basis of Rs59bn to be paid to KP on account of Net Hydel Profit (NHP) during the current year, Rs49bn on account of less recoveries and about Rs54.6bn against prior year adjustments.

The regulator has been resisting the government desire for Rs225bn additional revenue through tariff increases on legal grounds, saying its prior year determinations had not been notified by the government.