Staff Report
ISLAMABAD:
Central Power Purchasing Agency (CPPA) has asked the National Electric Power Regulatory Authority (NEPRA) to approve Rs 2.65 per unit power tariff hike under the head monthly fuel price adjustment.
As per details, CPPA, on behalf of power distribution companies (DISCOs), has requested NEPRA to approve an increase of Rs2.6587/kWh (Kilowhatt per hour) in the power tariff over the reference fuel charges i-e Rs 5.0229/unit for the month of September, 2021. And, the NEPRA will hold a public hearing on October 27, 2021 on CPPA’s application.
The CPPA, in its application, said that 36.24percent of electricity was produced from hydropower in September 2021 , while 17.05pc from coal, 8.90% from gas and 18.90% from imported LNG, 9.13% from nuclear, 7.11% from RFO (furnace oil), 1.64% from wind, 0.12% from baggasse, and 0.43% from solar in the said month.
In a public notice, NEPRA has invited all the interested /affected parties to raise written/oral objection as permissible under the law at the public hearing.
Pursuant to section 31(7) of the NEPRA Act (XL of 1997) and the mechanism for monthly fuel price adjustment prescribed by the Authority in the tariff determinations of ex-WAPDA distribution companies, the Authority may on monthly basis make adjustments in the approved tariff on account of any variation in the fuel charges and policy guidelines as the federal government may issue and notify so adjusted in the official gazette.
Earlier on September 15, the government had announced to increase the power tariff by Rs1.39 per unit which will be applicable from November 2021.
Addressing a press conference in Islamabad along with the State Minister for Information and Broadcasting Farrukh Habib, Minister for Energy Hammad Azhar said that the hike was due to mounting circular debt and the costly power houses installed by the last government.
“However, this increase in power tariff will not be applicable to the lifeline and domestic consumers who use less than 200 units of electricity in a month and in this way this increase is not applicable on 46 per cent of the consumer base”, Azhar said.
He added that this hike in the power tariff will also not affect the seasonal electricity package or the industrial package.
According to sources, for the period Jul-Oct 2021, the net subsidy amounting to Rs102 billion and for the period effective from November till June, subject to implementation of this proposal, the net subsidy for Nov 21 to June 2021 shall amount to Rs67 billion. In aggregate the subsidy requirement will be reduced from Rs240 billion to Rs168billion.
Sources also said that based on the consolidated revenue requirements of power distribution companies (DISCOs) as well as the economic and financial policy of the government, the tariff differential subsidy (TDS) was proposed to be modified and reduced through the circulation summary.
