ISLAMABAD: National Electric Power Regulatory Authority (Nepra) Tuesday grilled Gujranwala Electric Power Company (Gepco) team for supplying electricity to cold storages at par with industry instead of commercial rates duly approved by the regulator.
During a public hearing on Gepco’s tariff petition for FY 2023-24 under Multi Year Tariff (MYT) formula, the Authority also noted that on one hand number of pending connections have increased substantially and on the other the Disco is seeking higher capacity payment from consumers for the year 2023-24.
The Disco has sought an increase of Rs 3.63 per unit to Rs 27.64 per unit for 2023-24 from Rs 24.01 per unit of 2022-23 in its base tariff to raise revenue of Rs 345 billion during the next fiscal year.
Gepco’s team comprised of Chief Executive Officer, Muhammad Ayub, CFO Fayyaz Ahmad, Irfan Butt DG, Shahid Cheema Chief Engineer PMU and Junaid.
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During the hearing, Mathar Niaz Rana, Member Balochistan raised questions on Prior Year Adjustment (PYA) of Rs 3.3 billion which the court and subsequently Nepra has already disallowed. The Member was furious at Gepco for seeking that cost which has already been disallowed.
The Member also quizzed Gepco for seeking capacity payment which is 30 per cent of tariff without any proper planning. He enquired about optimal level of consumption/ load which can reduce the capacity payment to 15-20 per cent to make the company efficient. He proposed that Gepco should be directed to hire a Consultant to frame internationally accepted level of capacity payment.
It was noted by Nepra’s team that stock of pending connections of Gepco is on the rise which implies that its performance has declined for the last three months. In January 2023, pending connections were 7,000 which increased to 12,000 in February and were 25,000 in March. It was asserted that consumers are suffering despite payment of due connection charges.
During discussion on authenticity of data, Member Sindh raised a question on the capacity of the Disco which is merely relying on data available on website of Nepra. He also expressed his distrust of the data of Power Information Technology Company (PITC) which also provides data to GoP as well as the Discos.
Chairman Nepra enquired from CEO Gepco about status of cold storage. The CEO said that it is an industry and is doing value addition. He said that cold storage should be considered an industry.
Member Sindh, Rafique Ahmad Shaikh, inquired if cold storage tariff is at par with industry to which the CEO answered yes.
Chairman Nepra argued that the issue will be taken care of at a later stage. However, Member Balochistan raised a question on the legality of recovery of industrial tariff which is in clear violation of NEPRA’s decision which had approved the commercial tariff.
Rafique Ahmad Shaikh opined that this violation has very serious consequences, adding that this is not a joke. Nepra had approved a tariff of Rs 35 per unit for cold storages whereas Gepco is charging Rs 27 per unit, which is Rs 7 less than determined tariff. The issue of peak hour and off-peak hour also came under discussion.
Tanveer Barry, representative from Karachi chamber said that the Chamber opposes Disco’s request to continue fixed charges because industry is facing a crisis due to difficulties in opening LCs, high interest rate, gas availability and other issues adding that because of these factors industry is not running continuously and there is a burden of fixed charges.
He further stated that because of inefficiencies, Discos’ consumers are paying surcharge and government of Pakistan has withdrawn subsidies; and quarterly adjustments are an extra burden on consumers. In industry some equipment is on standby used in emergencies only.
Senator Nauman Wazir proposed that fixed charges be done away with. He further stated that industry should not be charged peak-hour tariff during load shedding whereas agriculture be declared as industry. Arif Bilwani, another intervener, proposed elimination of fixed charges for the industry.
Copyright Business Recorder, 2023
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