Staff Report
ISLAMABAD: The power sector in Pakistan faces potential electricity tariff hikes as both Power Distribution Companies (DISCOs) and K-Electric have submitted requests for increased rates in the month of June 2023.
The National Electric Power Regulatory Authority (NEPRA) is set to hold separate hearings on July 26, 2023, to evaluate the proposed tariff adjustments.
DISCOs, represented by the Central Power Purchasing Agency (CPPA), have sought a Rs 1.88 per unit increase in electricity tariff. According to the CPPA’s application, a total of 13,715 gigawatt hours (GWh) of energy was generated in June at a cost of Rs 9.63 per kilowatt hour (kWh). Out of this, DISCOs received 13,327 GWh at a cost of Rs 9.3930/kWh. The application details the energy production from various sources during June, including hydel, coal, RFO, gas, RLNG, nuclear, import from Iran, mixed sources, wind, bagasse, and solar.
Simultaneously, K-Electric, responsible for supplying power to Karachi, has submitted a request to NEPRA for a Rs 2.33 per unit increase in electricity tariff. This proposed adjustment is related to fuel charges and falls under the multi-year tariff (MYT) for the period 2017-2023. If approved, consumers in Karachi could face an additional financial burden of Rs 4,388 million in their electricity bills.
NEPRA has issued public notices inviting all interested and affected parties to present written or oral objections during the upcoming public hearing. However, consumers across the country should brace themselves for a potential rise in power prices as NEPRA is expected to grant approval for the proposed tariff adjustments for both DISCOs and K-Electric. The adjustments would be implemented under the Fuel Charges Adjustment (FCA) mechanism for June 2023.
The potential tariff hikes have sparked concerns among consumers, who already face the challenge of managing their household budgets amidst rising inflation and economic pressures. The decision by NEPRA will have significant implications for the affordability and accessibility of electricity for the general population, as well as for industrial and commercial sectors heavily reliant on stable and cost-effective power supply.
