Electricity consumers may face another Rs1.45/ unit tariff raise

ISLAMABAD   -    While presenting a bleak picture of the country’s power sector, National Electric Power Regulatory Authority (NEPRA) was Friday informed that consumers are saying goodbye to the national grid, owing to high electricity cost, net metering generation reached record 2000 MW, while the receivables of the Discos from private consumers touched Rs 1.3 trillion, as the regulator hinted allowing the power distributors the collection of an additional Rs1.45 per unit from the consumers.   

The NEPRA conducted a public hearing on the petition submitted by the Central Power Purchasing Agency (CPPA) on behalf of all distribution companies for authorizing the transfer of Rs 51.86 billion burden to power consumers on account of Quarterly Tariff Adjustments for the 3rd quarter (Jan to Mar) of FY 2023-24. Initially, CPPA-G had sought Rs 51.88 billion, however, it was downward revised to Rs 51.86 billion. In case the regulator approves the entire demand, it will have an impact of Rs1.45 per unit on the consumers which they will pay in July, August, and September. The final approval will be given after a thorough review. This rate hike will also be implemented on K-Electric consumers.

The CPPA-G had sought recovery of Rs51.88 billion, during the quarter, including Rs31.35 billion on account of capacity charges, Rs2.58 billion on account of use of system charge (UoSC) and market operator fee (MOF), and a Rs 5.57 billion positive adjustment is of variable O&M charges.

The regulator that was informed that electricity sale is constantly declining as people are leaving the national grid and switching to solar, while generation from net metering has reached to record 2000MW

According to NEPRA officials, that generation from net metering has reached to 2,000 megawatts, while in IESCO region it has climbed to 160 MW.

The net metering consumers showed concerns during the hearing regarding the potential decline in net metering rates and the implications of heightened net metering on grid electricity purchases.

Chairman NEPRA Waseem Mukhtar said, “We will address this matter when it comes to us.”

The Power Division emphasized the urgency of implementing the quarterly adjustment and noted that the fourth quarter adjustment would be submitted before July 15. By May 9, Rs 104 billion had been recovered from electricity defaulters, with the government still needing to recover Rs 1.3 trillion, said the official. With this pace of recovery, the entire recoverable amount of Rs 1.3 trillion will be recovered till 2050, the regulator noted.

During the quarter (Jan-March 2024), industrial consumption in IESCO decreased by three percent, and demand in the cement industry within IESCO jurisdiction dropped by 18.2 percent, stated the IESCO CEO.

In LESCO, electricity demand fell by 7.2 percent, with industrial demand down 15 percent and domestic demand down three percent, according to the LESCO CFO. Overall electricity demand in PESCO decreased by 9.1 percent, with industrial demand falling 17.7 percent and agricultural sector demand dropping 15.5 percent, the PESCO CEO reported.

SEPCO’s domestic sector demand decreased by 14.7 percent, said the SEPCO CEO, while commercial sector demand and tube well electricity demand decreased by 20 percent and 16.6 percent, respectively. SEPCO also reported that out of 800,000 consumers, 300,000 are running defaulters.

SEPCO had disconnected the connections of 5000 defaulters, and instead of coming for reconnections, they have opted for solar or net metering, the official said.

The Korangi Association expressed concerns over the high cost of electricity, with representative Muhammad Rehan warning that “in these conditions, the industry will shut down.”

The hearing also scrutinized the performance of HESCO, which NEPRA member Rafique Ahmed Shaikh criticized as the poorest among the companies. Notably, no representative from HESCO attended the hearing, prompting NEPRA to issue a show-cause notice. “The situation in HESCO is shameful,” stated Shaikh.

The NEPRA Chairman warned that HESCO is forcing the authority to take extreme measures. “I will personally write the note against HESCO in the decision,” he stated, adding that the Power Division would also act against HESCO.

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