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Express Tribune
13-02-2025
- Business
- Express Tribune
Power tariff goes down by Rs1.2 per unit
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday asked the State-owned power distribution companies (DISCOs) to refund Rs1.228 per unit to the consumers in their bills for the month of February 2025, on account of the monthly fuel charges adjustments (FCA) for December 2024. The decision was taken on a petition from the Central Power Purchasing Agency (CPPA), seeking permission to refund Rs1.0353 per unit. However, Nepra, after holding a public hearing on January 30, assessed a national average uniform decrease of Rs1.23 per unit in the applicable tariffs for DISCOs. This downward adjustment would apply to all consumer categories, except the lifeline consumers, domestic consumers consuming up-to 300 units, electric vehicle charging stations (EVCS), pre-paid consumers in all categories, and the agriculture consumers of all the XWDISCOs. The regulator also clarified that the negative adjustment on account of the monthly FCA was also applicable to the domestic consumers having Time of Use (ToU) meters, irrespective of their consumption level. In its decision Nepra also clarified that if the electricity bills for February 2025 had already been issued before the official notification of its latest decision, the adjustment would be applied in the bills for the following month – March 2025. Similarly, for K-Electric, the regulator approved a negative FCA of Rs1.23 per unit for November 2024, which would be reflected in bills for February 2025. If any February 2025 bills had been issued before the official notification, the adjustment would be applied in the following month. The FCA for K-Electric was approved on a provisional basis and subjected to adjustment, once Nepra finalised the utility's Multi-Year Tariff (MYT) for 2024-30 period. Any cost differences arising from the MYT determination would be incorporated into the future adjustments, the regulator stated. Nepra Member Tariff Mathar Niaz Rana in his additional note said that the regulator had approved a negative FCA of Rs1.23 per unit for the K-Electric's November 2024 billing, which was significantly lower than the Rs4.98 per kilowatt hour (kWh) requested by the utility. NEPRA determined that K-Electric's actual FCA should be negative Rs5.00 per kWh, or Rs7.21 billion cumulatively, but withheld Rs5.44 billion pending scrutiny of Rs8.7 billion in costs related to part load, open cycle operations, degradation curves, and start-up costs under the K-Electric's MYT. Some officials argued that the full FCA relief should be passed on to the consumers, as anticipated after the public hearing. Nepra would decide later whether to adjust the withheld amount upfront or stagger it over future FCA determinations. Quarterly adjustment Meanwhile, the consumers are also set to enjoy another relief because of the cut of up to Rs2 per unit in power tariff that amounts to Rs52 billion, on account of second quarterly adjustment for the ongoing financial year. After holding a public hearing chaired by Nepra Chairman Waseem Mukhtar, the regulator hinted on Wednesday at directing DISCOs, including the K-Electric to refund over Rs52 billion to the electricity consumers under the second quarterly adjustment for the outgoing fiscal. During the hearing, the regulator examined the key components of the adjustment, with officials highlighting that the major portion of the proposed relief stemmed from a reduction in the capacity payments.
Express Tribune
11-02-2025
- Business
- Express Tribune
NEPRA puts off security deposit hike
Listen to article ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) announced on Tuesday that it would withhold a decision on the proposed hike in security deposit rates until the completion of a thorough audit of the deposits taken by power distribution companies (DISCOs). At a public hearing, DISCOs faced the wrath of the power-sector regulator and interveners over the proposed substantial increase in security deposit rates. In a tense environment, Nepra members – Rafique Ahmad Shaikh, Mathar Niaz Rana, Amina Ahmed and Maqsood Anwar Khan – expressed dissatisfaction with the case presented by the representatives of DISCOs, led by Irfan Butt of Gujranwala Electric Power Company (Gepco). According to Nepra, the case of DISCOs appeared weak as they repeated the same arguments as given in previous discussions. The proposed hike in security deposit rates was perceived as an attempt to offload the financial burden caused by the operational inefficiencies of DISCOs on electricity consumers. In categorical terms, Nepra instructed K-Electric and Lahore Electric Supply Company to submit similar petitions because any increase in security deposit would be implemented uniformly across the country under a standard tariff structure. The proposal for a significant increase in security deposit rates met with strong opposition from various interest groups. Prominent voices including those of Arif Bilwani, Tanveer Barry, Imran Shahid of Jamaat-e-Islami, Asim Riaz of the All Pakistan Textile Mills Association and representatives of the Lahore Chamber of Commerce and Industry, rejected the increase, arguing that it stemmed from DISCOs' own mismanagement and inefficiencies. A pivotal question that loomed over discussions was whether the increase would apply to mosques and military installations, which neither Nepra nor DISCOs could adequately address. The proposed hike, designed to cover defaults by consumers, would affect all the existing users. To ease the financial strain, the increased security deposit was suggested to be collected in installments. However, Nepra Member (Tariff) Mathar Niaz Rana raised questions over the authenticity of security deposit as an audit team of Nepra had identified discrepancies in deposits collected by three DISCOs. There were also concerns that the rise in security deposit could push more consumers towards alternative energy solutions, such as solar power, thereby reducing the demand and revenue for DISCOs. Irfan Butt from Gepco's Mirad Division acknowledged that the shift to solar energy could further dampen consumer demand. Representatives of the Karachi Chamber of Commerce and Industry voiced concern over the proposed increase, especially for industries. Tanveer Barry pointed out that the hike in security deposit – from Rs2,010 to Rs54,783 – would put an unbearable financial burden on businesses and force them to consider alternative energy sources, such as solar power, to mitigate costs. He cited figures from Nepra's State of Industry Report 2024, which revealed a massive gap between the sanctioned load and peak demand pertaining to both K-Electric and DISCOs. He emphasised that the proposed increase in security deposit was an attempt to justify inefficiencies by imposing higher costs on consumers. Barry and others pointed out that the inflated sanctioned load of DISCOs, in relation to the actual capacity, was driving up security deposit. According to the Nepra report, the sanctioned load for 10 DISCOs was far higher than the peak demand, indicating that consumers had been overcharged for energy they would never consume. Aamir Sheikh, a representative of the industrial sector, weighed in by highlighting the financial strain industries would bear due to the proposed increase in security deposit. He underscored the challenge of paying Rs250-300 million in additional security deposit, saying that such a move would further burden an already struggling industrial sector. Sheikh emphasised that those funds, if made available, would be better utilised for expanding the industry and creating jobs rather than masking the inefficiencies of DISCOs. Arif Bilwani argued that DISCOs were guilty of inflating their sanctioned load, which resulted in collection of inflated security deposit from consumers. His comments reinforced the growing sentiment that the proposed hike was unjustified, especially given the large discrepancies between the sanctioned capacity of DISCOs and the actual demand. At the conclusion, Nepra Member (Technical) Rafique Ahmad Shaikh categorically said without concrete guarantees of improved service, including an end to 10 to 15 hours of load-shedding, Nepra would not approve the proposed hike in security deposit. He stressed that the authority would wait for the final audit report from its team before taking a decision. For now, the push for higher security deposit rates remains in limbo, with Nepra's final determination dependent on the outcome of ongoing audits and the resolution of key questions about efficiency and fairness in operations of DISCOs.
