The National Electric Power Regulatory Authority (Nepra) has slashed consumer tariff of six power distribution companies (Discos) from nine paisa to Rs 2.39 per unit across the board with the exception of lifeline consumers, those who use up to 50 units per month, and agriculture consumers. However, tariffs of Faisalabad Electric Supply Company (Fesco) and Peshawar Electric Supply Company (Pesco) were raised by six paisas and one paisa per unit respectively.
The tariff of Gujranwala Electric Power Company (Gepco) was reduced by 64 paisa per unit, Hyderabad Electric Supply Company (Hesco) by 13 paisa, Lahore Electric Supply Company (Lesco) by nine paisas and Multan Electric Power Company (Mepco) by 30 paisa.
The reason behind this reduction is the settlement of charges already over- billed by the Central Power Purchase Agency (CPPA) to the Discos in the name of capacity payment and mark-up on delayed payment to the IPPs. The prime beneficiary of this downward revision in tariff is Quetta Electric Supply Company (Qesco) whose tariff has been reduced by Rs 2.30 per unit (kWh). The Nepra considered Qesco's request for monthly adjustment under the monthly adjustment of Power Purchase Price (PPP) of June 2009.
According to the information, placed before the authority, the actual PPP for June charged to Qesco by Central Power Purchase Agency (CPPA) was 6.0337 kWh. Having gone through the documentary evidence, it was noted that in June, the CPPA charged a substantial amount of Rs 7.444 billion as energy adjustment. Clarifications were sought from the CPPA accordingly which informed that the major component of this adjustment pertain to KESC's marginal cost differential of Rs 6.835 billion.
In addition to this, the CPPA also charged mark-up on delayed payment to the IPPs of Rs 177.731 million as energy charge and Rs 49.042 million as capacity charge. The authority is of the view that such adjustment is not covered under the monthly PPP mechanism and needs to be considered separately. The authority, has, therefore decided not to allow the amount of Rs 7.06 billion on account of KESC's marginal cost differential and mark-up on delayed payment to the IPPs.
The Nepra thereby directed the CPPA to revise the invoices of June 2009 accordingly. After excluding the amount of Rs 7.06 billion, the actual PPP has been worked out at Rs 5.1207 kWh, which is Rs 0.4897 kWh lower than the reference PPP of Rs 5.6104/ kWh.
The authority, after incorporating the impact of target distribution losses of 20.50 per cent, has calculated per unit adjustment in the determined tariff as Rs 2.39 per unit. The cases of other Discos are similar, but the amount charged as energy chares, capacity payment and mark up on delayed payments to the IPPs are different.
It is pertinent to mention here that the government has agreed with the International Monetary Fund (IMF) to raise power tariff by 26 per cent in three phases, in addition to six per cent increase in tariff as a result of rental power plants (RPPs) which, according to Finance Minister Shaukat Tarin are very expensive. The government has to arrange 3.25 billion dollars to make contract payment to the RPPs.