The federal government has decided to collect Rs. 55 billion electricity bills from consumers deferred due to floods last year, under the revised circular debt management plan approved by the Economic Coordination Committee (ECC).
In addition, the Ministry of Energy (Power Division) has also estimated to collect Rs. 73 billion from February to November 2023 through an increase in electricity tariff.
The Ministry of Energy has projected Quarterly Tariff Adjustment (QTA) From February to March 2023 @ Rs. 3.21/unit and @ Rs. 0.69/unit QTA from March to May 2023.
The ministry has estimated to collect Rs. 57 billion (Rs. 40 billion in the next two months and Rs. 17 billion in April and May). The ministry has also estimated an increase @ Rs. 1.64 per unit QTA from June to August 2023 and @1.98 per unit from September to November 2023.
Sources said that the ministry has informed the ECC that a new iteration for forecasting power purchases price which is around 90 percent of the total power sector revenue requirement has been carried out and the revised base case circular debt is Rs. 952 billion based on estimates for the fiscal year 2023 (FY23).
However, it estimated that variation in the exchange rate could result in around Rs. 5 billion change in power purchase invoices.
As per the revised plan, the power ministry will also minimize DISCOs losses to 16.27 percent through timely tariff increases by end of FY23. It has also communicated to ECC that the ministry will also renegotiate power purchase agreements with 6 wind power plants and Uch Power Limited.
Moreover, the government will also discontinue Kissan and Zero Rated Industrial packages from March 1, 2023, and save Rs. 65 billion.
Under the package, markup saving due to IPP stock payment would be Rs. 11 billion, FCA recovery till June 2023 Rs. 31 billion, PHL markup surcharge recovery Rs. 68 billion, GST and Taxes on collection basis Rs. 14 billion, reimbursement from FBR Rs. 5 billion and additional subsidy from the government would be Rs. 335 billion.
Meanwhile, the projected circular debt flow for the year would be Rs. 336 billion whereas the revised circular debt projection after stock payments would be Rs. 122 billion.
The circular debt stock would be Rs. 2,374 billion in FY23 which includes Rs. 765 billion parked in PHL, Rs. 1,509 billion payable to power producers, and Rs. 100 billion GENCO’s payable to fuel suppliers.
As per the revised plan, the Ministry of Energy (Power Division) has planned to maintain a recovery ratio of 90 percent as recoveries have deteriorated due to extensive flood and tariff increases.
