ISLAMABAD: The National Electric Power Regulatory Authority (Nepra), on Thursday, projected a massive increase in electricity tariff in the coming months under the Quarterly Tariff Adjustments (QTAs) as overall electricity consumption has dropped by 20 percent.
The concerns on substantial dip in electricity consumption were expressed by the authority, the CPPA-G and industrialists at a public hearing on negative adjustment of paisa 58 per unit for the month of August 2024.
However, net impact of negative adjustment will be paisa 20 per unit as the impact of negative adjustment of paisa 37 per unit of July 2024 will be done away with in September 2024.
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NTDC Board Chairman Dr Fayyaz Chaudhry also shared his views on the reason of decline in consumption, overcapacity in generation under capacity of transmission, unplanned establishment of power plants in south. He suggested that an integrated approach is needed to resolve electricity issues of the country.
During the hearing, Prior Year Adjustment (PYA) of Rs15 billion and over 100 per cent increase in tariff of bagasse-based generation and bringing it at par with local coal.
Two key industrialists, Arif Bilwani and Aamir Shaikh, were of the view that consumption of electricity could not increase, until incentives are not given to the industry.
“The issue of surplus electricity will not resolve until demand of industry is increased through attractive tariff incentives,” Bilwani said, adding that peak and off-peak hours’ tariff for the industry should be the same for 24 hours. He said, special tariff should be announced for holidays and incremental demand.
Shaikh was also of the view that the industry is shifting to solar or other sources such as HSFO, generation from which is cheaper than the national grid. He expressed his concerns on less negative FCA for August than expectations as it will increase QTA. He also proposed that a special incentive be announced for the industry.
Member (Tariff and Finance) Mathar Niaz Rana was of the view that increase in price of electricity is one of the key reasons of decrease in overall demand of 20 per cent including industry.
During discussion on massive decline in electricity consumption, NEPRA Chairman Waseem Mukhtar said that Authority is also concerned about decrease in electricity demand. He said data about import of solar plats was apparently unauthentic.
Member Sindh Rafique Ahmad Shaikh, who is raising the issue of decline in electricity demand continuously for the last couple of years, said that industry is closing which is the main reason of decline in consumption. He said, electricity demand has declined by 25 per cent in August against reference demand, projected by the Regulator for the month.
Rafique Shaikh said that why consumers are penalised for the incompetence of Discos, adding that burden of revenue shortfall or loans from banks are passed on to the consumers. Discos raise loans from banks and burden of interest are passed on to them through surcharges.
He was of the view that no study has been conducted so far on the reasons of decline in consumption, rejecting claims of NPCC in which it was stated that August 2024 was historic wettest and coolest month due to which demand reduced remarkably.
NPCC representative Wajid Chattha shared graphs with the authority to prove that the main reason behind decline in consumption was massive variation in weather in the month.
“Massive solarisation and weather variations are also impacting electricity consumption from the national grid,” he continued. Member Khyber-Pakhtunkhwa Maqsood Anwar said that industry is saying itself that industrial units are being closed due to expensive electricity.
Copyright Business Recorder, 2024
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