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ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has approved Re 0.57 per unit increase in tariffs of power Distribution Companies (Discos) for the first quarter of FY 2021-22 under Quarterly Tariff Adjustment (QTA) mechanism.

The Authority held a public hearing on February 23, 2022 on the petitions of Discos for adjustments in their quarterly tariffs under QTA mechanism.

According to the decision sent to Federal Government for final approval and notification, Nepra said that based on discussions, information submitted by CPPA-G, adjustment requests filed by Discos and keeping in view the aforementioned adjustment, the amount of quarterly adjustment for the first Quarter of FY 2021-22 has been worked out as positive Rs 14.337 billion on account of variation in capacity charges, variable O&M, Use of System Charges (UoSC), Market Operator Fee (MOF) and FCA impact on T&D losses.

The Authority also noted that CPPA-G in its data included an amount of Rs 1.856 billion on account of capacity charges of KAPCO. The Authority noted that KAPCO’s PPA was amended by CPPAG, wherein it was agreed that the plant will be operated without payment of capacity charges from July 2021 onward and only energy charges would be paid.

Nepra needs to work harder

Upon inquiry from CPPA-G regarding inclusion of capacity charges of Rs 1.856 billion of KAPCO, it has been submitted that claimed cost is on account of adjusting costs pertaining to previous periods i.e. May 2019 to June 2020 as per the PPA, however no proper justification/documentary evidence has been provided.

Therefore, while working out the quarterly adjustment, the entire amount of Rs 1.856 billion on account of capacity charges of KAPCO has been provisionally withheld. The Authority will consider this amount in the subsequent quarterly adjustments, once CPPA-G provides complete details and justifications of the claimed amount.

After going through Discos’ case and available data, the Authority has determined a positive uniform rate of Re0.5715/kWh, for the allowed positive amount of quarterly adjustments of Rs 14.337 million pertaining to the first quarter of FY 2021-22, across each category of consumers of Discos (except lifeline consumers), based on notified projected sales, after excluding there from the sales to life line consumers, to be recovered in three months - from June 1, 2022.

Member Sindh, Rafique Ahmad Shaikh in his dissenting note observed “basis for periodic adjustment in tariff for first quarter of FY 2021-22 is being placed before Authority in April 2022- very delayed case. Discos need to submit the adjustments in timely manner.”

He maintained that to bring financial discipline in power sector it is necessary to carry out the audit of operation of CPPA-G.

Copyright Business Recorder, 2022

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