For the first quarter of the Financial Year 2023–2024, the National Electric Power Regulatory Authority (NEPRA) increased the power tariff for all power consumers nationwide by Rs. 1.15 per unit due to periodic tariff adjustments.
Before announcing an increase in the price of electricity, NEPRA made a notification to the federal government about its decision to raise the power tariff.
NEPRA Approves Rs. 1.15 Per Unit Increase in Power Tariff
“The decision sent to the Federal Government for intimation and action, if any, by the Federal Government under Proviso (ii) of Section 31(7) of NEPRA Act, before its notification by NEPRA pursuant to the said Proviso of Section 31(7) of NEPRA Act, 1997,” said NEPRA decision.
The regulator decision states that K-Electric and all other customers will be subject to an increase in electricity prices of Rs 1.15 per unit.
However, this increase in the price of electricity will take effect on January 1, 2024, and last through March of that same year.
“While effecting the Quarterly Adjustments, the concerned DISCOs shall keep in view and strictly comply with the orders of the courts notwithstanding this order,” reads the NEPRA decision.
It should be mentioned that the burdensome power consumers in the nation will bear an extra expense of around Rs. 22 billion and 29 crore (Rs. 22,297 million) as a result of the increase in electricity prices.
Power Distribution Companies Request
In accordance with the notified mechanism in this regard, power distribution companies (XWDISCOs) previously filed requests with NEPRA for adjustments on account of capacity charges, transmission charges, and market operator fee, the impact of additional units and T&D losses on FCA, and variables operation & maintenance charges for the first quarter of FY 2023–24, or July to September 2023.
Additionally, the NEPRA, chaired by Waseem Mukhtar, held a public hearing on November 14, 2023, to hear applications from power distribution companies (DISCOs), and it said that a final judgment will be made at a later date.
During the hearing, NEPRA representatives stated that XWDISCOs requested an increase totaling about Rs. 22 billion and 56 crore, and the impact of this would vary based on the month in which the customers make this quarterly adjustment.
According to them, the rise in power tariff will be approximately Rs. 1.25 per unit over the course of the next three months if the increase is allowed.
According to them, XWDISCOs cut back on their power purchases in July, August, and September since their power purchases dropped by 9.50%.
XWDISCOs bought 38 billion units in total rather than 42 billion, according to NEPRA representatives.
They emphasized that if the statistics had according to reference cost, adjustments might have negative.
Quarterly Adjustment
In response to a query, NEPRA representatives explained that a uniform rise in electricity tariff will implement nationwide on the directive of the federal government, meaning that all consumers nationwide will subject to a quarterly adjustment.
They noted delays in the K-Electrics case when it came to the execution of quarterly adjustments.
They added that the federal government provides subsidies to make up the gap between K-Electric’s quarterly adjustments and the DISCO adjustments.
At the conclusion of the public hearing on the quarterly adjustment requested by the XWDISCOs due to variation in the Power Purchase Price (PPP) for the first quarter of fiscal year 2023–24, the regulatory authority stated that the final decision regarding the raise in power prices will decide later.
To read our blog on “NEPRA approves Rs. 3.08 per unit hike in electricity bills,” click here.