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ISLAMABAD:
Nepra may have placed an extra burden of Rs8.7 billion on the responsibility of power consumers to provide IPPs that could not generate even a single unit of power.
The government dismissed some IPPs late last year and ceased payments that were linked to capacity costs on them. 63 IPPs are being consulted, and it may take up to six months to ensure that a new deal is arrived at to completely inhibit these payments.
For now, consumers are billed for the capacity charges that contribute up to 70% of the total bill while the price goes as low as Rs 17 per unit. In fact, the cost of being tariffed has come down to a generation cost of 9.25 Rupees only per unit of electricity.
The Discos have indicated to the regulatory body the PPAs they wish to alter for the first quarter of FY 2024-25 – September 2024 – under the new notified procedure.
The power regulator will issue a notice of its estimates and will make a hearing of the put and call option on November 20.
The Discos have asked Nepra to hike the power tariff, which if approved, would add a fresh burden of 08.71 billion rupees to electricity consumers across the country.
The request submitted with Nepra by Faisalabad Electric Supply Company (Fesco) Gujranwala Electric Power Company (Gepco) Islamabad Electric Supply Company (Iesco) Lahore Electric Supply Company (Lesco) Multan Electric Power Company (Mepco) Peshawar Electric Supply Company (Pesco) Quetta Electric Supply Company (Qesco) Sukkur Electric Supply Company (Sepco) and Tribal Areas Electricity Supply
Registration IPPS
From the details, the Discos operational and maintenance cost is recovered through the following charges proposed in the Discos’ tariff structure: These Nepra documents also include lists of the main areas for which incremental funds are needed: Rs8.06 billion in capacity charges that the generation plants bear even if they are not supplying power because they need to be available as a reserve.
In addition, Rs 1.25 billion has been requested for operation and maintenance expenses which include refurbishment of the distribution network and maintaining network stability besides refurbishing the distribution system.
The same proposal has been provided for Rs1.65 billion for System charges and market operations fees (UoSC &MoF). Some are directed towards the expense necessary for operating the grid system and the market functions that are part of the provision of the electric power supply chain. All of them lead to the general expenses in financial terms ensuring the stability of the grid as well as bearing the costs for the service provision by the distribution companies.
However, the document also uses a phrase of saving to the tune of about Rs2.25 billion by reducing transmission and distribution losses. This saving was achieved because of the optimization of the power network in an effort to mitigate some of the extra costs and share the load among more consumers.
The matter relating to the distribution companies’ request shall be called in the Nepra hearing scheduled to take on Nov 20. If approved it will be reciprocated by customers all over the country and the K-Electric consumers will also have an increment on their bills. The implication of this change if implemented could affect budget and expenditure all over the country because this regulation directly affects the electricity bills for users every month.
As such, the Discos have submitted requests for adjustments as per the notified tariff structure including capacity charges, transmission charges, fees charged by the market operator, holding louder for incremental units, T & D losses impact on FCA, and adjustable operation and maintenance cost for the first quarter of FY 2024-25 ( July-Sep 2024) through the notified procedure.