Electricity

NEPRA slashes power tariff by 99 paisa per unit to refund Rs 22.5 billion to consumers

Writer Syeda Sadia Shahid

Posted on January 29, 2022

The National Electric Power Regulatory Authority (Nepra) has notified a 99-paisa per unit cut in power tariff for consumers of ex-Wapda distribution companies (Discos).

The Power Division had requested the cabinet to protect the domestic consumer up to 300 units, the impact of inform quarterly adjustment for the 4^th quarter of 2019-20- and the 1st and 2^nd quarter of 2020-21, that came to Rs 1.72/kWh notified by Nepra in August 2021 was not passed on to them. They were being cross-subsidized from other categories.

The power division requested that the benefit of negative QTA determined for the 4^th quarter of 2020-21 should not be passed to non-ToU domestic non-protected consumers with less than 300 units usage.

The power division demanded that instead of passing on the impact of a 99-paisa per unit decrease to all consumers in a quarter, it should spread over 12 months to avoid liquidity issues of power companies. The proposal was rejected by the cabinet and the National Electric Power Regulatory Authority notified a 99-paisa per unit reduction in electricity rates for the consumer of ex-Wapda distribution companies under quarterly adjustment (QTA).

This will be effected from Feb 1 and will remain in place up to April 30, 2022. The consumers will get the relief of Rs 22 billion. The adjustment is on account of different cost variations, variable O&M, use of system charges, market operator fee, and impact on system losses.

Any adjustment would be settled between ex-Wapda Distribution companies at the level of Central Power Purchasing Agency (CPPA). The negative QTA is applicable across each category of consumers (except lifeline and protected category consumers for being already subsidized) based upon notified projected sales after excluding the sales to the lifeline and protected category consumers.

The notification says that the regulator in its decision of December 1, last year, in the matter of Industrial Support Package (ISP) for additional use and abolishment of Time of Use Tariff Scheme for Industrial consumers of Discos decided that no quarter adjustment would be passed on to B1, B2, B3, and B4 industrial consumers to the extent of incremental sales till continuation of the ISP.