ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Wednesday agreed to increase tariffs of power Distribution Companies (Discos) by Rs 4.35 per unit for July 2022 under monthly Fuel Charges Adjustment (FCA) mechanism, amid hue and cry by NTDC on massive deductions and fears of hurdles due to the decision of the Lahore High Court (LHC) in FCA case.
The Authority, comprising Chairman Tauseef H Farooqi, Member Sindh Rafique Ahmad Shaikh and Member KP, Maqsood Anwar Khan raised questions with the officials of CPPA-G. The Authority focused on conveying to the audience that the impact of Rs 4.35 per unit for July 2022 was far less than impact of Rs 9.99 per unit in June 2022.
Chief Executive Officer (CEO), CPPA-G, Rehan Akhtar informed the Authority that CPPA-G would challenge the decision of LHC in FCA as less recovery of Rs 133 billion will hamper uninterrupted supply to the consumers. Nepra also offered to join CPPA-G in contesting the case in the LHC.
The officials of NTDC made a hue and cry over massive deductions by the Authority which has created a financial mess for the organisation. The Authority, however, did not hear NTDC officials, saying that they will see what presentation was made by the organisation separately.
FCA for July: CPPA-G seeks Rs4.70 per unit hike in Discos’ tariffs
In another hearing, the Authority showed agreement in reduction of up to Rs 4.10 per unit in FCA for the month of July 2022. However, since NEPRA in its decision had allowed KE to pass on only Rs 3.0114 per unit against cumulative increase of Rs 11.1023 per unit in June to charge in August 2022, the remaining i.e. Rs 8.0909/kWh shall be charged in the billing month of September 2022.
During hearing, it was suggested that since a reduction of Rs 4.09 per unit for July, the remaining amount of 3.99 per unit may be passed on to KE consumers in September 2022 as is being implemented in Discos. However, the chairman argued that the increase should be deferred for one or two months but Tariff Section officials said that increase must be at par with Discos.
The Authority also agreed to approve Rs 14.53 QTA for KE for fourth quarter April-June 2021-22 to recover additional Rs 60 billion. This amount, however, will be picked up by the federal government as subsidy to maintain uniform tariff across the country.
The Authority and consumers’ representatives from Karachi raised questions on continued load shedding in July, fixed charges and performance of KE’s own power plants. Arif Bilwani, Aneel Mumtaz, Rehan Javed and other consumers questioned the performance of power utility.
Tanveer Barry, Chairman of power & Gas sub-Committee KCCI said the impact of QTA is usually not passed onto consumers under the uniform tariff policy applicable across the country but if it is passed on to KE’s consumers as per IMF dictation, KCCI will protest and reject any increase in power tariff.
He further contended that the power tariff is already high and when the industry tariff is raised from Rs 19.22 toRs 29.13 per unit in addition to GST, fixed charges and other charges, the policy of peak and off-peak hours suspended and commercial and domestic tariffs raised then it would negatively affect output and quality of life.
Regarding fixed charges Barry said this is unacceptable as it would further increase the cost of doing business because fixed charges will apply as per load on operational industries and will be applicable on inoperative industries as well that will be compelled to pay exorbitant fixed charges. The Nepra should hold a public hearing regarding fixed charges, and consumers who want to minimize their sanctioned load should be allowed to do so, he added.
Member Sindh urged KE to focus on renewable energy sources to reduce cost of generation for its consumers.
CFO KE, Aamir Ghaziani sought help from the regulator for provision of indigenous gas to its plants, which is the right of power utility as per gas allocation policy, to ensure cheap electricity.
The chairman Nepra raised questions on delay in KE’s RLNG-fired plant which is facing technical fault.
Copyright Business Recorder, 2022
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