DISCOS (The Power Distribution Companies) of WAPDA have initiated filing fresh petitions for increasing tariff under the newly introduced 2-part tariff mechanism. The intention for increasing tariff is for passing on full electricity costs to those consuming the electricity in a timely manner. The power companies are obligated for filing separate tariff petition for supplying and distributing electricity under the amended NEPRA Act (Regulation of Generation, Transmission and Distribution of Electric Power Act).
Power companies intend to pass on full electricity costs to the consumers
It is the new requirement of section 23-E of the NEPRA Act that “Power Supply” license holders would be allowed to perform the functions of electric power sale. Section 20 describes that licenses would be limited to ownership, management, operation & control of distributing facilities for the movement of delivery to consumers.
Currently the Discos are deemed to hold power license under section 23(E). All non sale elements of distribution segment (installation, operation maintenance, investment & controlling of distribution network) are now part of the distribution license. Before that distribution license holders were performing all sales related activities (metering, billing & collection, etc) which are now to be performed by the supply license holders.
That is why it is required for Discos to submit a petition (before increasing any tariff) including clear cost bifurcation for distribution & supply function.
Government, on the other hand, has committed with IMF (International Monetary Fund) for elimination of delays in adjustment of tariff & re introducing the government powers for introducing tariff surcharge “ over and above the system’s requirement” for financing over Rs. 110 billion annual financing cost of over Rs. 1.7 trillion circular debt.
NEPRA Act has been further amended for giving the regular power for determining & notifying the quarterly tariffs & ensuring timely submission of annual and quarterly petitions filed by Discos. Now most of the Discos are filing separate tariff petitions for adjustment of current fiscal year. The regulator would be conducting separate public hearings for each distribution company. The hearings will be started in the second week of the next month.
DISCOS are asking for tariff increase of 10 to 27% from the existing one e.g. the Sukkur Electric Power Company has asked for an increase of about 10% in the average scale rate. Similarly the Quetta Electric Supply Company has asked for an increase of 26% in the current tariff. Increase of 24% has been asked by the Peshawar Electric Supply Company. The said company claims that its total system losses are 37%. MEPCO (The Multan Electric Power Company) has also asked for an increase of almost 54% in its net average tariff prevailing currently.
Surprisingly, HESCO is looking forward to decrease the net average rate of current tariff by 20%
Opposite to all, The Hyderabad Electric Supply Company, however, is asking for 20% decrease in its net average rate. An additional recovery of about Rs. 29 billion has been made by The Islamabad Electric Supply Company through the consumer tariff.
The tariff petitions by remaining companies (Faisalabad, Gujranwala & Lahore) are bucketing in and the regulator companies would taking those up after completing hearing for 6 Discos — names being Iesco, Mepco, Pesco, Sepco, Hesco and Qesco.