Nepra okays electricity price hike

F.P. Report

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) allowed state-run power distribution companies (Discos) and K-Electric to increase electricity rates by Rs3.28 per unit for the next six months, starting from October 2023 to March 2024.

All the consumers will be charged an extra Rs3.28 per unit on account of the fourth quarterly adjustments for FY23 (April-June 2023). This increase has been made due to the variation in capacity charges, Variable O&M, additional recovery on incremental sales, Use of System Charges, Market Operator Fee, and fuel charge adjustment (FCA) impact on transmission and distribution (T&D) losses.

All Discos and K-Electric will collect nearly Rs183 billion (including GST) from power in these six months. Excluding GST, the Discos collection stands at Rs135.58 billion and the K-Electric will charge up to Rs20 billion. Interestingly, of this collection (without GST), over Rs130 billion is for paying capacity charges to Independent Power Producers (IPPs).

It should be noted that no quarterly adjustments would be passed on to Bl, B2, B3 and B4 industrial consumers to the extent of incremental sales till the continuation of the package, in line with the Authority’s decision of December 01, 2020.

On August 24, 2023, Nepra held a public hearing on the petition filed by the companies.

Representative of the Ministry of Energy during the hearing submitted that the proposed quarterly adjustment may be recovered from consumers in a period of six months in order to minimise the impact on consumers. The ministry said that the impact would be around Rs3.55 per unit instead of Rs6.20 per unit if passed on to consumers over a period of six months instead of three months.