ISLAMABAD – The National Electric Power Regulatory Authority (Nepra) allowed Wapda distribution companies (Discos) to increase the tariff of electricity by 48 paisa per unit for the fiscal year 2015-16, here on Wednesday.
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The decision was made after one and a half year as the federal government had challenged its decision of February 29, 2016, obtaining a stay order from the Islamabad High Court (IHC). But, now, the regulator allowed the raise in line with the court orders.
Apart from the price hike, Nepra unanimously rejected a series of demands by the government that would have burdened consumers with more than Rs225 billion on account of higher losses, non-recovery of bills, late payment surcharge etc.
The majority decision translates into an increase of 48 paisa per unit in the tariff, however, the government has yet to intervene to decide any subsidy or to green light the swell.
The settlement allowed about Rs24.34bn to the distribution companies on account of the write-off of unrecovered amounts from chronic defaulters.
These write-offs included Rs15.75bn by Peshawar Electric Supply Company, Rs2.85bn by Lahore Electric, Rs2.06bn by Hyderabad Electric, Rs2.01bn by Sukkur Electric and Rs1.37bn by Multan Electric. Such write-offs by Gujranwala Electric and Faisalabad Electric stood at Rs149 million and Rs161m, respectively.
Member Tariff Himayatullah Khan gave a dissenting note regarding the write-off and opined that even if write-offs were allowed, this should be first approved by Discos’ boards of directors, which apparently opposed the move.
“The write-offs would further facilitate and reinforce the rampant inefficiencies within the system and put an upfront burden on consumers,” he said.