NEPRA to Hold Public Hearing to Determine Base Tariff Hike for Discos

The National Electric Power Regulatory Authority (NEPRA) will hold a public hearing to determine the uniform base tariff hike of Rs. 7.91 per unit (having an annual impact of Rs. 893.83 billion) for all the Power Distribution Companies.

The federal government has intimated the NEPRA regarding the anticipatory approval of the Prime Minister for the base power tariff increase and has requested the regulator to conduct a public hearing on the uniform base tariff for all the distribution companies and KE during the ongoing month, an official source told ProPakistani.

Soon after the anticipatory approval by the Prime Minister, the Power Division approached NEPRA to conduct a hearing on the matter and convey its decision to the federal government for notification. Increasing base tariff is one of the pre-requisite of the IMF deal, and the government has no option but to approve the hike from all the concerned forums soon after Eid, the source said.

It is worth mentioning that earlier this week Prime Minister Shahbaz Sharif granted anticipatory approval for the increase of base power tariff, which will empower Ex-Wapda Distribution companies (XWDiscos) to collect an additional Rs. 893.83 billion from the consumers during the Fiscal Year 2022-23.

NEPRA, on June 2, 2022, approved an increase of almost 47 percent (Rs. 7.91 per unit) in base power tariff.

The decision will enhance the national average base tariff to Rs. 24.82 per unit from the existing determined national average tariff of Rs. 16.91 per unit. However, after applying 17 percent GST to the new base tariff, the per-unit cost will reach around Rs. 29.034 per unit.

On June 2, 2022, NEPRA issued its determination to increase the base power tariff. In terms of Sections 31(4) and 31(7) of the Act ibid, approval of the Federal Government is required to file a reconsideration motion before NEPRA for determination and notification of uniform tariff within 30 days of the decision by the regulator.

The Economic Coordination Committee (ECC) had already recommended that the tariff may be passed on to consumers in three phases, i.e., Rs. 3.5 per unit in July 2022, Rs. 3.5 per unit in August and the remaining increase of Rs. 0.91 per unit in October 2022.

NEPRA, as an independent regulator, can notify the tariff determination after 30 days, which is July 3, 2022. If the regulator adopts such a course, it will result in the application of very high tariffs on all domestic categories, including those currently protected by the government through various subsidies. XWDISCOS and Karachi Electric, in such an eventuality, will have no choice but to bill the consumers on such inequitable rates. This may result in serious unrest amongst the consumers.