For now, the news is the third and fourth quarter tariff adjustments, which was due in August as per the promise to the IMF (read: First promise to the IMF broken, published on September 3, 2019). The hearing is scheduled later this month, and the determinations submitted must give a sigh of relief to the power consumers.

Recall that the previous round of periodic adjustments in lieu of first and second quarter adjustments had resulted in an average increase of Rs1.5 per unit, to cover the gap of Rs189 billion spread over 15 months. This time around, the adjustments are far smaller, at Rs63 billion – one-third of the previous half yearly adjustment.

The additional impact on the end consumer would be around Rs0.5 per unit, taking the total impact of FY19 quarterly adjustments to an average Rs2 per unit. It is pertinent to note that the adjustments will not alter the tariffs for bulk of domestic consumption, consuming up to 300 units, which constitutes nearly 78 percent of all domestic consumption.

And if the previous treatment of quarterly adjustments to the tariff is any guide, the impact on domestic consumers using over 300 units will also be lower than other categories, such as commercial and industrial. In all likelihood, domestic consumers, using over 300 units, will be facing an additional Rs0.25 per unit, on account of second half adjustment, and taking the full year adjustment to Re1 per unit.

Within in the power purchase price adjusted for the last two quarters, the capacity price component has refreshingly come down drastically. What was Rs172 billion of upwards adjustments in the first half on account of capacity payments, has come down to only Rs33 billion. This should be a much easier to pass on for the government, which is busy making efforts to bring down the circular debt, and as per official numbers, the pace of accumulation has come down from Rs30 billion a month to under Rs10 billion a month.

All eyes will now be on the full year tariff notification by Nepra for FY20, as the Central Power Purchasing authority has submitted a detailed report, as regards the power purchase price, for each disco, in good detail. A cursory look tells the average PPP would hover around Rs11.5 per unit, which is 15 percent higher from the PPP for FY18. And also seems to be based on lofty demand projections and surprisingly low rupee dollar assumption of 150/USD. From the first look at the CPPA report, another tough bullet to bite is just around the corner.