Based on monthly invoicing to ‘GoAJ&K’: Power supply to AJ&K should be billed at basket rate: MoF

ISLAMABAD: The Ministry of Finance has proposed that electricity supply to Azad Jammu and Kashmir (AJ&K) should be based on monthly invoicing to GoAJ&K on the prevalent basket price rather than through Discos on the same lines as prevalent in K-Electric and other Discos, well-informed sources told Business Recorder.

Finance Division offered these remarks on a summary of Power Division to AJ&K. Power Division, in its proposal, recommended that electricity supplied to AJ&K by Discos shall be at the National Average Power Purchase Price for Discos at Common Delivery Points (CDP) as determined by NEPRA in annual determination of Discos including relevant cost (allowed T&D losses, DM, PYA) of Discos. NEPRA while determining the annual Schedule of Tariff (SoT) of Discos for FY 2024-25, shall design the SoT for AJ&K accordingly.

However, Finance Division argued that as per recommendations of the Committee Constituted by Prime Minister in Dec 2017, duly approved by the ECC of the Cabinet on March 20, 2019 as well as during the meeting held on May 29, 2023 with the Government of AJ&K, “CPPA may start monthly invoicing to GoAJ&K on the ‘prevalent basket price’ rather than through Discos, on the same lines as being made to K-Electric and other Discos “.

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Finance Division further suggested that Power Division clarifies whether the proposal to charge Average National Power Purchase Price (inclusive of T&D losses, DM, PYA) is in line with previous decisions.

Power Division’s proposal that difference in current and revised applicable base rate shall be allocated to remaining consumers has been agreed to by the Finance Division.

The sources said Finance Division has also supported Power Division’s proposal of applicability of Fuel Charges Adjustment (QTA) and Quarterly Adjustment (QTA) to AJ&K.

On the proposal that Power Division be authorized to issue policy guidelines to National Electric Power Regulatory Authority (NEPRA) in this regard the Power Division endorsed the proposal, and Finance Division suggested that Federal Government may issue guidelines to NEPRA for supply of electricity to Government of AJ&K as an export item at basket price to Central Power Purchasing Agency-Guaranteed (CPPA-G).

The sources said, Power Division’s summary on new electricity tariff mechanism for AJ&K will soon be submitted before the Economic Coordination Committee (ECC) of the Cabinet.

Copyright Business Recorder, 2024