The National Electric Power Regulatory Authority (Nepra), in response to Power Division’s appeal, is leaning towards allowing distribution companies (Discos) to impose extra charges of Rs2.31 per unit on users from October 2023. This six-month charge will generate Rs146 billion for Discos’ fourth quarter of FY2023 via the quarterly tariff adjustment (QTA). While Discos had initially suggested a Rs5.41 per unit increase for the last quarter of 2023, the Power Division, noting public affordability and potential revenue loss, asked for a recovery span of six months at a reduced rate.
Read: NEPRA’s Electricity Rate Increased by Rs 5.40 per unit
Industrial Shutdowns Affecting Power Demand
Rising electricity tariffs have caused many industrial users to cease operations, leading to a significant decrease in power demand for Discos. Noteworthy reductions include Tesco at 41%, Hesco at 19%, and several other companies showing double-digit decreases in the April-June 2023 quarter. The power regulator expressed concern over the CEOs of Discos’ inability to justify this downturn in electricity use.
Concerns Over Figures and Efficiency
Nepra officials questioned the presented figures, suggesting they could impact Discos’ cash flow and increase circular debt. Further observations from Nepra emphasized that inefficiency and overbilling shouldn’t fall on the consumers. They highlighted the need for structural reforms over provincialisation for Discos, aiming for genuine improvements in the sector. Lastly, it was revealed that the Central Power Purchasing Agency had sought the additional amount as part of the third QTA of FY2022-23, with consumers expected to pay a significant portion towards capacity charges for Independent Power Producers (IPPs).
