Islamabad-The National Electric Power Regulatory Authority (NEPRA) has allowed seven Power Distribution companies (DISCOs) to transfer the burden of additional Rs15.456 billion to their consumers, while directed three other DISCOs to make reimbursement to their consumers on account of quarterly adjustments.
According the National Electric Power Regulatory Authority (NEPRA) decision, the regulator has allowed DISCOs to charge an average of Rs0.4689/unit as additional amount from their consumers in three months— April to June— on account of the adjustment for the second quarter of the fiscal year 2022-23.
It is worth to note that the distribution companies had sought the regulator nod for recovering Rs17.391 billion from the consumers for quarterly adjustment on account of capacity charges to Independent Power Producers (IPPs), use of system charges (UoSC) and market operator fee (MOF), variable O&M charges, and the impact of T&D losses on FCA for the quarter of FY 2022-23. Interestingly, Independent Power Producers (IPPs) would be paid Rs8.0 billion as capacity charges. However, the NEPRA has allowed the cumulative collection of Rs15.454 billion from consumers.
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The CPPA-G, in the costs billed to DISCOs for the 2nd quarter of the FY 2022-23, has included legal charges of Rs14.93 million as part of capacity charges. The CPPA-G also vide letter dated 07.02.2023, requested to allow Rs550.25 million on account of legal charges disallowed by the authority in previous quarterly adjustments and Rs14.93 million for current quarter, which in total works out as Rs565.18 million The authority in the determinations of the CPPA-G market operation fee observed that the CPPA-G reflects the costs incurred on account of legal/litigation charges in the capacity costs billed to DISCOs. In view thereof, the CPPA-G was directed to include the said cost in its market operation fees and got it approved from the authority.
The authority, in consistency with its earlier decision in the matter, has decided not to allow the amount of legal charges requested for the 2nd and 1st Quarter amounting to Rs14.93 million and amount of Rs550.25 million, requested for the previous quarters, on the same account, while working out the instant quarterly adjustments.
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It is also noted that the CPPA-G in its data has included amount of Rs91.7 million on account of capacity charges of KAPCO. The authority noted that KAPCO’s PPA was amended by the CPPA-G, wherein it has been agreed that plant will be operated without payment of capacity charges from July 2021 onward and only energy charges would be paid. Upon inquiry from the CPPA-G regarding inclusion of capacity charges of Rs91.7 million of KAPCO, it has been submitted that claimed cost is on account of truing up of costs pertaining to previous periods as per the PPA. The CPPA-G, although provided some detail in this regard, however, the authority has decided to provisionally not consider the claimed amount of KAPCO and would consider it in the subsequent quarterly adjustments, once the same is verified. Accordingly the amount of Rs91.7 million has been deducted from the claim of XWDISCOs.
The CPPA-G while claiming the capacity charges of IPPs has claimed Rs95.5 million on account of PPIB fee as part of capacity charges. Since the matter is under consideration of the authority and the required information is still awaited from PPIB/CPPA-G, therefore, for the purpose of instant quarterly adjustments i.e. 2nd quarter of FY 2022-23, the positive amount of Rs95.5 million as claimed by the CPPA-G on account of PPIB fees as part of capacity charges has been provisionally excluded till final decision of the authority in the matter.
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As per the decision, for Islamabad Electric Supply Company (IESCO) consumers, the increase would be Rs03578/unit to collect Rs1.217 billion, Lahore Electric Supply Company (LESCO) Rs0.6748/unit (Rs4.89 billion), Gujranwala Electric Power Company (GEPCO) Rs1.9782/unit (Rs6.707 billion), Faisalabad Electric Supply Company (FESCO) Rs0.9936/unit (Rs4.602 billion), Multan Electric Power Company (MEPCO) Rs0.4022/unit (Rs2.388 billion ), Hyderabad Electric Supply Company (HESCO) Rs1.1238/unit (Rs1.704 billion) and from Tribal Electric Supply Company (TESCO) Rs2.3274/unit or total Rs1.269 billion. However, three DISCOs would be made reimbursement for their power bills. Peshawar Electric Supply Company (PESCO) will reimburse Rs0.5339/unit (or Rs1.957 billion), Quetta Electric Supply Company (QESCO) Rs1.011/unit (Rs1.675 billion) and Sukkur Electric Power Company (SEPCO) will return Rs3.0344/unit (or Rs3.487 billion) to its clients.
Since three DISCOs had deliberately kept the consumers without electric supplies as to not pay the capacity charges, so they are not going to pass on the increase but have to return.
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The NEPRA during the hearing had also expressed concern over this tactic by these DISCOs did not use the full electricity, so there is a mess somewhere. The NEPRA had sought a detailed report from PESCO and others on the non-utilisation of electricity to full capacity.
In its decision, the authority said that this adjustment will be applicable to all DISCOs customers except lifeline customers and K-Electric consumers. No quarterly adjustments would be passed on to the industrial consumers (B1, B2, B3, and B4) to the extent of incremental sales till the continuation of the package, in line with the authority’s decision on 1st December 2020.