Electricity tariffs to increase further by Rs1.9 per unit

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) sanctioned a rise in electricity tariffs by up to Rs1.90 per unit, effective for the fourth quarter of the fiscal year 2023-24.

The decision will translate to an additional burden of Rs46.805 billion on customers of both public sector power distribution companies (DISCOs) and the private utility K-Electric (KE).

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The increase in electricity tariffs stems from several factors, including a reduction in overall electricity consumption, diminished use of maximum demand indicators (MDI), and losses associated with aggregate technical and commercial issues.

Despite the hike, NEPRA Chairman Waseem Mukhtar indicated that consumers will benefit from a Rs1.80 per unit decrease in their September 2024 bills. This adjustment includes a Rs0.31 per unit reduction in fuel charges for July 2024 and a Rs0.90 per unit cut in the previous quarter’s tariff adjustment.

The adjustment’s financial impact on KE’s customers will be covered by a government subsidy. NEPRA did not provide specifics on how these cover losses, or unused capacity payments to independent power producers (IPPs) will affect costs.

The tariff adjustments for the fourth quarter are broken down as follows:

– Islamabad Electric Supply Company (IESCO): Rs926 million

– Lahore Electric Supply Company (LESCO): Rs3.995 billion

– Gujranwala Electric Power Company (GESCO) Rs7.682 billion

– Faisalabad Electric Supply Company (FESCO): Rs4.777 billion

– Multan Electric Power Company (MEPCO): Rs7.909 billion

– Peshawar Electric Supply Company (PESCO): Rs674 million

– Hyderabad Electric Supply Company (HESCO): Rs5.016 billion

– Quetta Electric Supply Company (QESCO): Rs8.078 billion

– Sukkur Electric Power Company (SEPCP) Rs4.538 billion

– Tribal Areas Electric Supply Company (TESCO): Rs3.210 billion

This total amount includes Rs22.867 billion for capacity charges, Rs3.566 billion for variable operation and maintenance costs, Rs7.513 billion for system usage and market operator fees, Rs11.067 billion for transmission and distribution losses, and Rs1.792 billion for net metering expenses.

NEPRA officials expressed dissatisfaction with DISCOs, particularly Peshawar Electric Supply Company (PESCO), for restricting net metering. The regulator criticized DISCOs for underutilising their allotted capacity and proposed penalties for those companies failing to use their full quotas.

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The authority is investigating the effects of ATandC losses on service interruptions and plans to address the findings in future actions. NEPRA requested detailed data on power allocations and usage from the National Power Control Centre (NPCC).