Quarterly Tariff Adjustment: Rs113bn impact to be shifted to KE consumers by way of surcharge

ISLAMABAD: Power Division and Finance Division has reportedly evolved consensus to pass on Quarterly Tariff Adjustment (QTA) notification impact of Rs 113.1 billion to the consumers of K-Electric (KE) by way of surcharge of Rs 2.35/ unit to be recovered in three years, well informed sources told Business Recorder.

This proposal has been prepared in terms of section 31 sub-section 8 of NEPRA Act, so the need for government subsidies is minimized, with a view that principle of equity between consumer of Discos and K-Electric may remain intact.

Power Division has also proposed that it may be authorized to file a motion before NEPRA for incorporation of proposal A above in the Schedule of Tariff (SoT) of NEPRA determination of November 05. 2021.

NEPRA may be requested to issue revised SoT for KE with prospective application of applicable uniform rates after incorporating the proposal to notify in the official gazette by way of modification in SRO Nos.1429(1) 2021, 192(1)/2021, 1037(1)2020 and 575(1) 2019.

Rs7.91 hike in base tariffs of Discos approved

Further upon such notification, K-Electric may be directed that such surcharge collected shall be omitted to CPPA-G immediately to reduce the large outstanding payable. Both these proposals have also been supported by the Finance Ministry.

However, Finance Ministry has not supported Power Division’s proposal in which the latter has sought authority to utilize available budget by way of re-appropriation against the claims of zero-rated industry, FATA and AJK for which the budget is exhausted during current financial year.

According to sources, Finance Ministry argues that allocated funds may be fully utilized for outstanding KE’s TDS claims, if any, after verification/ reconciliation.

Power Division has been advised to verify/ reconcile the claims submitted by KE on provisional basis for the period October 2016 to March 2020 against subsidy releases made against these claims by the Finance & Power Divisions. After reconciliation claims may also be audited through Auditor General of Pakistan, the sources maintained.

Finance Division is also of the view that the provision of automaticity under the NEPRA Act regarding quarterly tariff adjustments with respect to DISCO’s consumer tariffs, KE’s consumers also be treated at par with those of DISCOs so the KE’s quarterly tariff adjustment be made timely to avoid any additional burden on the government of Pakistan that may create cash flow problems in the power sector.

Copyright Business Recorder, 2022