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Nepra cuts tariff by 35 paisa/unit

National Electric Power Regulatory Authority (Nepra) has approved roughly 35 paisa per unit reduction in power tariff for consumers of Discos, except lifeline consumers, after review of previous determinations, financial impact of which has been calculated at Rs 35 billion.

This decision was taken at a public hearing of the Authority on Thursday duly represented by the officials of Discos but no representation from consumers” rights bodies was present who allegedly pocket substantial funding from donors under the guise of consumers. Likewise, there was no representation from Ministry of Water and Power, Ministry of Finance and Ministry of Law and Justice who could have opposed the regulators” decision.

Power sector analysts argue that Nepra”s decision will add Rs 35 billion to the energy sector circular debt which is at present around Rs 100 billion. During the hearing, it was revealed by Nepra officials that Discos received Rs 35 billion as Fuel Price Adjustments (FPAs) from the Government of Pakistan (GoP) in accordance with notifications which they had collected from consumers, which implies that Discos collected double the amount ie Rs 70 billion both from the GoP and the consumers.

According to an official, Discos have started filing revised monthly fuel adjustment invoices to Nepra . Nepra officials reveal that reduction in tariff in July 2012 will 62 paisa per unit, for August 38 paisa, October 50 paisa, in November it will be 65 paisa, December 28 paisa, January 62 paisa 2013, February 21 paisa, March Rs1.06, April Rs1.77 and May 93 paisa.

The Authority has decided that the relief to consumers will be extended during the same months in which an extra amount was collected from them so that the cash flow of Discos is not affected. Nepra”s decision will not be applicable to Pesco as they did not collect FPA from consumers in accordance with the apex court order. Chairman Nepra enquired from the representative of Pesco whether the Disco has chalked out any plan to recover the amount of FPA from the consumers if the court gives decision in favour of Disco. According to the Pesco”s representative the company has to recover Rs 54 billion from the consumers as FPA and tariff.

He also raised the issue of electricity procurement from Gadoon Textile Mills without issuance of generation licence. An insider revealed that Pesco is purchasing power from the textile mill at Rs 28 per unit. The mill has already obtained a stay order from the High Court. The Authority did not entertain arguments offered by the Iesco”s legal advisor, Khaleeq-uz-Zaman against the imposition of equalisation surcharge in the tariff, saying that it was the decision of the GoP, not Nepra.

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