ISLAMABAD:
The National Electric Power Regulatory Authority (Nepra) has approved an increase of Rs 1.55 per unit in the electricity tariff due to a quarterly adjustment.
The electricity distribution companies (DISCO) will recover 39 billion rupees from consumers following the tariff revision.
The regulator, in a decision on Thursday, allowed an increase in the electricity tariff due to varying capacity charges, variable operation and maintenance (O&M) costs, the use of system charges, market operating costs and the impact of the fuel cost adjustment (FCA) of transmission and distribution losses for the second quarter of fiscal year 2021-22.
The regulator “approved a positive amount of Rs 39 billion due to quarterly adjustment” for the second quarter of FY22 for ex-Wapda distribution companies, the regulator said in a statement.
The quarterly adjustment has an impact of approximately 1.5547 rupees per kilowatt hour (kWh) on a uniform basis on all consumers, except for vital consumers and additional industrial sales eligible for the industrial support program.
Nepra said it had decided to apply the same from July 1, 2022, which would be recovered within three months from the date of notification.
To calculate the instantaneous quarterly DISCO adjustment, the regulator obtained details of the actual cost of purchasing electricity charged by the Central Power Purchasing Agency-Guarantee (CPPA-G) to DISCOs for the relevant period.
CPPA-G provided the information for the second quarter of FY22, i.e. October-December 2021.
According to the details, the cost recovered from the additional units beyond the fuel cost, i.e. Rs 12.96 less the benchmark fuel cost for each month, had been adjusted from the quarterly adjustment calculated on the basis of the net units.
Similarly, the prior year adjustment (PYA), as well as the sales mix for the period, would be calculated on a net units basis, i.e. excluding units purchased for incremental sales , he added.
Thus, no further adjustments would be allowed for units purchased for incremental sales.
Nepra, in determining the operating fee for the CPPA-G market, observed that the CPPA-G passed on the costs incurred as litigation costs in the capacity costs billed to the DISCOs.
In this regard, the CPPA-G was instructed to include the said cost in its market operating costs and obtain approval from the authority.
CPPA-G, however, in the costs charged to DISCOs for the second quarter of FY22, included legal fees of Rs 5.4 million as part of capacity charges.
The regulator decided not to include legal fees in the immediate quarterly adjustments.
As a result, when developing the quarterly snapshot adjustments, the legal fees of Rs 5.4 million had not been taken into account.
In addition, the CPPA-G included in its data an amount of Rs 1,946 million as Kapco’s capacity charge.
Nepra pointed out that Kapco’s power purchase agreement (PPA) had been amended by CPPA-G, in which it was agreed that the plant would be operated without payment of capacity charges from July 2021 and that only the energy charges would be paid.
Following an investigation by the CPPA-G regarding the inclusion of Kapco’s Rs 1,946 million capacity charge, it was stated that the claimed cost was for the previous period as per the PPA.
Although the CPPA-G provided details in this regard, the regulator decided to provisionally withhold the amount claimed and would take it into account in subsequent quarterly adjustments.
Due to the discussion, information submitted by the CPPA-G and adjustment requests verified by the DISCOs, Nepra authorized the quarterly adjustment for the second quarter of FY22 at Rs 39,001 million.
Published in L’Express Tribune, June 17e2022.
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