Discos allowed increase in power tariff: lifeline consumers exempted

The National Electric Power Regulatory Authority has allowed power distribution companies - Discos - to increase their tariff from 38 paisa to 70 paisa per unit in accordance with biannual fuel adjustment formula.
However, the impact would not be passed on to the lifeline consumers, using upto 50 units monthly, official sources told Business Recorder here on Thursday. According to the determined tariff, the consumers of Peshawar Electric Supply Company (Pesco) would have to pay 70 paisa per unit, followed by Qesco 59 paisa, Hesco 59 paisa, Iesco 49 paisa, Mepco 48 paisa, Gepco 47 paisa, Fesco 44 paisa and Lesco 38 paisa per unit.
The sources said the new raise was over and above 28 paisa per unit increase, which had been kept aside by the government owing to political considerations. "It will be very difficult for the new government to pass on the accumulated increase to consumers," said a federal government official.
Another reason, which could be cited for withholding revised tariff notification, the sources said, was the biannual raise that was based on actual tariff sent to the regulator for review. The ministry of water and power had filed review petitions with Nepra after Discos rejected the determinations.
The sources said that the ministry of water and power had dispatched tariff determinations to the concerned Discos, asking them to apprise the ministry if they agree to the assumptions of Nepra.
Currently, the revenue requirements of Discos are determined through the tariff set by Nepra. The government stance was that the power sector customers were not able to fill the entire revenue requirements gap of the Discos for which subsidy was needed.
The Asian Development Bank has calculated the current annual subsidy requirement close to Rs 55 billion for 2007-08. The sources said the financial issue was related to the current and past debt obligations of the Discos and NTDC. The debt overhang was Rs 152 billion in 2006 and the audited accumulated figures till 2007 was Rs 199 billion.
The finance ministry agrees that the debt overhang needs to be kept away from day-to-day operations of both Discos and NTDC whereas due to its enormity, a financial restructuring plan needs to be developed. The sources said the ADB has offered assistance to develop the financial restructuring plan together with the ministries of water and power and finance.