ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has put a stamp on an additional surcharge of Rs3.39 per unit from March to June 2023 and Rs1.43 per unit (Re1 per unit new surcharge and Rs0.43 per unit existing) to be charged from July to November 2023.
On March 2, 2023, the Power Division informed Nepra that the federal government envisaged arrangements, whereby, the GoP guaranteed finance facilities have been executed through Power Holding Limited (PHL) for funding the power sector payables. Out of the total outstanding finance facilities of Rs800.253 billion, as of 30.06.2022, servicing of loans amounting to Rs246.384 billion is being managed by imposing Financing Cost (FC) surcharge levied @ Rs0.43/kWh on March 22, 2018, as modified from time to time. This FC surcharge @ Rs0.43 /kWh is not sufficient to cover markup charges of total PHL loans. The markup of remaining loans is being paid from revenue collected through electricity sales and the same constraints the essential fuel and debt payments to the suppliers.
Concerning the issue, the Economic Coordination Committee (ECC) on February 10, 2023, duly ratified by the Cabinet on February 14, 2023, approved the additional surcharge of Rs3.39/unit to be recovered for the period from March to June 2023 to cover the markup charges of PHL loans not covered through already applicable FC surcharge of Rs0.43/kWh for the FY 2022-23, total surcharge becomes Rs3.82/kWh for the said period and for FY 2023-24, an additional surcharge of Rs3.39/unit be reduced to Re1/unit to cover the additional markup charges of PHL loans, not covered through already applicable FC surcharge @ Rs0.43/kWh, the total surcharge becomes Rs1.43/unit for the FY 2023-24.
It was also decided that the approved additional surcharge be made part of the Schedule of Tariffs of XWDISCOs. The surcharge so collected is within 10 percent of the aggregate revenue requirement of all electric power suppliers engaged in supply of electric power to end consumers, as determined by the Authority.
Rs3.82/unit surcharge approved for power consumers
Upon inquiry from the Authority, it was explained by the ministry that the additional surcharge is intended to cover the markup charges of PHL loans not covered through already applicable FC surcharge of Rs0.43/kWh. It was also explained that with these additional surcharge, an additional amount of Rs75 billion will be billed for the period from March to June 2023, against which around Rs68 billion will be recovered at an expected recovery of 90 per cent. Similarly, for the FY 2023-24, with the additional surcharge of Rs11kWh, an amount of around Rs74 billion will be recovered assuming recovery @90 per cent.
Regarding, the payment of the principal amount of PHL loans, the ministry explained that the federal government has already paid an amount of Rs202 billion of PHL till FY 2021-22, through its fiscal space, thus, reducing the balance from over Rs1 trillion to Rs800 billion as of 30.06.2022. Similarly, for the FY 2022-23 an additional amount of Rs35 billion will be paid, and this will further reduce the overall financing cost.
The ministry also mentioned that for K-Electric consumers since the existing surcharge of Rs0.43/kWh is not applicable, therefore, the total surcharge may be charged from the consumers of K-Electric. The consumers present during the hearing opposed the additional surcharge by stating that these are inefficiencies of DISCOs which are being proposed to be recovered through the application of additional surcharges, and would be paid by the paying consumers.
According to the determination, the Authority instead, has decided to allow the application of an additional surcharge through instant decision, ie, Rs3.39/kWh to be recovered from the consumers of DISCOs, for the period from March to June 2023, to cover the markup charges of PHL loans for the FY 2022-23. For the FY 2023-24, the additional surcharge of Rs3.39/kWh shall be reduced to Re1/kWh to cover the additional markup charges of PHL loans, thus, the total surcharge shall become Rs1.43/kWh for the FY 2023-24.
Copyright Business Recorder, 2023