ISLAMABAD-The National Electric Power Regulatory Authority (NEPRA) on Thursday linked the transfer of Rs 128bn to power consumers on account of additional surcharge and staggered FCAs with legal opinion, saying the regulator is neither accepting nor rejecting the government motions till it is furnished.
NEPRA held a public hearing on the government’s petitions to allow the imposition of Rs3.39 per unit additional surcharge and transfer of upto Rs 14.23/unit staggered FCAs to power consumers. In two separate public hearings on the motions filed by the federal government, NEPRA has said that the regulator is not clear whether the transfer of both the burdens is within their domain or not and sought legal opinion on the matter. Nepra Chairman Tauseef H. Farooqi chaired the proceedings, while the authority’s members were also present. In the first hearing, regulator nod was sought to allow putting burden of an additional surcharge of Rs3.39/unit on the electricity consumers, having an impact of Rs76 billion from March to June 2023. The NEPRA official said that already, Re0.43/unit is being charged to consumers and now the government wants to increase it to Rs3.82/unit. Additional surcharge of Rs3.39/unit will be recovered for period from March to June 2023, to cover the markup charges of PHL loans not covered through already applicable FC surcharge of 0.43/kwh for FY2022-23. After four months additional surcharge of Rs3.39/ unit will be reduced to Rs1/unit to cover the additional markup charges of PHL loans not covered through already applicable FC surcharge @0.43/unit; the total surcharge becomes Rs. 1.43/unit for FY 2023-24. The levying of additional surcharge of Rs3.39/unit in electricity tariff will enable the government to pay off Rs120b interest on the loans of the Power Holding Company.
Tessori vows to continue consultations with stakeholders for economic stability
With the application of additional surcharge of Rs3.39/unit, the total surcharge will reach Rs3.82/unit for the four months (Mar-June). Currently, the power consumers are paying Re0.43/unit surcharge to clear Rs44b for paying off the interest on the loans of the PHL. Now with the levying of special surcharge of Rs3.39/unit, additional Rs76b will be collected from the power consumers within next four months March to June 2023. Out of the total outstanding finance facilities of Rs. 800.253 billion, as of June 30,2022, servicing of loans amounting to Rs. 246.384 billion is being managed by imposing Financing Cost (FC) surcharge levied @ Re. 0.43/unit under dated March 22 2018 as modified from time to time. This FC Surcharge @ Re 0.43 /unit is not sufficient to cover markup charges of total PHL loans. The mark up of remaining loans is being paid from revenue collected through electricity sales and the same constrains the essential fuel and debt payments to the suppliers. Total surcharge becomes Rs 3.82/unit for the said period and for FY 2023-24, additional surcharge of Rs. 3.39/unit will be reduced to Rs. 1/unit to cover the additional markup charges of PHL loans not covered through already applicable FC surcharge @ 0.43/unit; the total surcharge becomes Rs. 1.43/unit for FY 2023-24. Chairman NEPRA, who presided over the proceedings, asked whether the regulator can reject this proposed imposition of the surcharge. The Power Division officials replied that yes, it can. NEPRA chairman said that the Authority has strong reservations about the imposition of this surcharge, as those who are loyal consumers and regularly pay their bills are to pay Rs3.39/unit surcharge, while those who do not pay their bills are smiling at us. The authority is neither accepting nor rejecting this surcharge and linked it with the legal opinions and asked the Power Division to take legal views on it and then come to us. “We need the legal position of the government regarding the imposition of surcharge,” he said.
Shahida Raza sacrifices her life in Italy shipwreck to save son's health
Due to the inefficiencies of the power companies, the power consumers are being burdened with high surcharges. Chairman said that if NEPRA allows recoveries in this way, then other procedures will become redundant. If the government has the authority, then it should not shift the responsibility onto NEPRA. This situation did not emerge in one day. We had several times forewarned the government of deteriorating power management, but no heed was given. It indicates the inefficiencies of the Power Division due to which every year the situation becomes bad to worst. Member NEPRA Rafique Ahmad Shaikh asked the division to do its homework on the issue, take legal views regarding the surcharges and then come to Nepra. He further said that the surcharge will not solve the issues of the government. He said that the industrial tariff could go up to Rs32/unit. If industries opt for an alternate option, then how the government can do the recovery? Ironically, the Power Division official had no answer to reply and said that we have not looked into this question so far. Chairman NEPRA said that our energy sector governance and recoveries are not settled while challenges of losses are increasing. We are pressing on the subsidy’s surcharges, but are not willing to address the actual issues. Meanwhile, the authority also conducted second public hearing on the petition for recovery of staggered Fuel Charges Adjustment (FCAs) that was applicable for August and September 2022, of Discos and K-Electric in eight months starting from March 2023. The federal government has sought NEPRA’s policy guidelines for transferring the burden of Rs52 billion to the electricity consumers on account of staggered fuel charges adjustments (FCAs) for the months of June and July 2022. It is worth mentioning here that the federal cabinet through circulation had already approved the recovery of Rs52b on account of two FCAs from the consumers of Discos and KE. NEPRA had determined the FCAs of Rs9.8972/unit and Rs4.3435/unit for the months of June and July 2022, respectively. The FCA for both the months was supposed to be charged in the billing months of August and September 2022, respectively, for XWDiscos.
Dar accuses Imran of economic woes
For the consumers of K-Electric, the regulator had determined an increase of Rs9.8972/unit on account of FCA to be charged in the August 2022 billing cycle. Similarly the tariff was increased by Rs8.0909/unit on account of FCA for June 2022, which was supposed to be charged in September 2022. Since the July FCA was negative Rs4.1171/ unit, therefore for June FCA the consumers were supposed to pay only an additional Rs3.9738/unit instead of Rs8.0909/unit hike determined by NEPRA on account of June FCA. Rebasing of uniform tariff determined by NEPRA and recommended by it as “final tariff’ for publication in the official gazette was notified by the federal government in order, to not burden the consumers disproportionately in a sequence of Rs 3.5/unit in July 2022 and Rs 3.5/unit in August 2022. Consumers were hit by Rs 9.8972 per unit of FCA plus Rs 7/unit of rebasing simultaneously in August billing. This is an average increase of Rs 16.90/unit over and above the July rates. The above adjustments in tariff significantly increased the electricity bills for the months of August and September 2022. The government wants to transfer burden of up to Rs 14.24/unit to power consumers during next eight months. NEPRA linked staggered FCAs recovery to legal opinions.
Govt greenlights taking strict action against PTI: Rana Sanaullah
Chairman NEPRA said that Supreme Court’s order is already there regarding the recovery of outstanding, so now the Power Division should tell us how the deferred payments should be recovered. The official of the Division said that due to floods, the recoveries were deferred. Now, if in one go it was charged, then consumers would be unable to pay and it will affect the govt’s recoveries’ position. Member NEPRA Rafique Ahmad Shaikh said that the govt should have opted for recoveries in the winter months.