But if you thought 2019 was tough, brace yourself for tougher. Call it 2020. The quarterly adjustments will happen no differently from previous two quarters. The magnitude of adjustment would also probably be on a much lower side, as bulk of the log has been cleaned up in 2019. Yet, it would not be easy. The biggest surprise may well be dealt in the form of base year tariff revision in July 2020 - -and not the quarterly automatic tariff adjustments.

This time around, the IMF is right under the nose too, keeping an eye on power related revenue measures like never before. Some of the key structural benchmarks of the IMF programme also revolve around more around getting the tariffs right (and high) than getting the house in order (see: ‘Revenue at the heart of power reforms,’ published December 26, 2019).

What 2020 has in store for power pricing is partially evident from the IMF’s first review of the programme and the country’s progress. So while it appears, there is little juice to be extracted in terms of adjusting for capacity payments, the brunt will shift to all kinds of surcharges. Amending the Nepra Act through the parliament is one of the modified structural benchmarks, which clearly reflects that the IMF wants more revenue from power sales – and the current tariff structure alone may not offer it.

So now, not only will the tariffs be subject to fresh surcharges, of which the first one will be in the form of first half payment of the Net Hydel profits, the rules of the game will also be altered to use altogether a revised benchmark to make room for lower actual recoveries of discos. Then, the IMF has all so subtly hinted at “better targeting of subsidies”, which could simply mean revised tariff slabs for 80 percent of the domestic consumers. That could mean an entirely different level of household energy inflation.

To top it off, the base tariff revision could still require subsequent adjustments, as the assumptions to some of their projections are way off. Pricing power with dollar at 150 and absurdly low gas and oil prices, essentially indicates the next round of quarterly adjustments would also be on the higher side. There are no easy fixes. But revenue is not the only tool that will fix it – it is one of many. And yes, structural reforms can happen simultaneously. The pace of revenue measures could at times be counterproductive in the larger picture.