Nepra approves an extra Rs7.0562/unit towards power costs for March

Nepra approves an extra Rs7.0562/unit towards power costs for March

On Monday, the National Electric Power Regulatory Authority (Nepra) permitted the state-owned power distribution companies to add Rs7.0562 per unit to the electricity users’ bills for the month of March 2024.

The fuel charge change for January 2024 led the regulator to approve the additional charges.

Customers are predicted to bear a financial burden of about Rs56 billion as a result of this decision, which could increase to approximately Rs66 billion when the 18% general sales tax is taken into account. It is significant to remember that all consumer groups are affected by this price hike, with the exception of lifeline customers and electric vehicle charging stations (EVCS). Notably, the Central Power Purchasing Agency (CPPA) requested Rs7.13 per unit in its petition on behalf of Discos.

The biggest worry expressed by the analysts is the fuel price hike of Rs. 14.6206/kWh for January 2024. Because of this, the authority has decided to launch an investigation under Section 27-A of the NEPRA Act to determine the cause of the extremely high fuel cost that CPPA-G has claimed for January 2024, while closely monitoring the situation.

To this end, a notice of appointment of investigation officers in accordance with Section 27 of the NEPRA Act and a separate investigation order will be issued later.

After Ramzan, the authority also made the decision to assess each DISCO’s performance separately in order to ascertain whether any violations of the act, rules, regulations, or license have occurred. This evaluation will be conducted after the data for the first nine months of FY2023–24—from July 2023 to March 2024—is available.

Sales, losses, recoveries, connections, outages, and other factors will all be included in the performance evaluation, and each DISCO will be held accountable for any departure from the standards established by the relevant authorities.

Eventually, the authority would also issue directives to each DISCO and NTDC, requiring them to present a feasible and workable strategy to their respective BoDs for approval in order to enhance their performance and guarantee adherence to the authority’s benchmarks and targets.

In order to guarantee that the rebasing of rates for FY2024–25 is completed on schedule, the authority further instructed the Ministry of Energy (MoE) to submit its power purchase price projection for FY2024–25 and the DISCOs to file their annual indexation adjustment request for FY2024–25 as soon as possible.

The MoE was also instructed by the authority to raise demand and confer with all pertinent parties in order to present a proposal that addresses issues such as system stability, evacuation from the north to the south, and system limits.