National Electric Power Regulatory Authority Approves Tariff Hike for FY2023-24

By | July 14, 2023

The National Electric Power Regulatory Authority (Nepra) has given its approval for an increase in the national average power tariff by Rs4.96 per unit for the current fiscal year. This decision aims to address various factors affecting the power sector in the country.

Higher National Average Tariff for FY2023-24

In a press release, the power regulator stated, “The revised national average tariff for the FY2023-24 has been determined as Rs.29.78/kWh, which is Rs.4.96/kWh higher than the previously determined national average tariff of Rs. 24.82/kWh.” This increase is primarily attributed to several factors, including overall low sales growth, rupee devaluation, high inflation, exorbitant interest rates, and the addition of new capacities.

Uniform Tariffs and Government Notification

The Nepra informs the federal government about the determined tariffs to file a uniform tariff application. Once the government incorporates the amount of subsidy/surcharges, the uniform tariff determined by Nepra is officially notified and applied to consumers. This process ensures transparency and standardization in the electricity tariff structure.

Tariff Petitions and Determination for FY2023-24

Under the multi-year tariff regime for FY 2023-24, various electric power companies have filed adjustment/indexation requests. The companies include Multan Electric Power Company (Mepco), Gujranwala Electric Power Company (Gepco), Hyderabad Electric Supply Company (Hesco), Sukkur Electric Power Company (Sepco), Quetta Electric Supply Company (Qesco), Peshawar Electric Supply Company (Pesco), and Tribal Electric Supply Company (Tesco).

Additionally, Islamabad Electric Supply Company, Lahore Electric Supply Company, and Faisalabad Electric Supply Company have submitted multi-year tariff petitions for the period from FY2023-24 to FY2027-28. They have also requested an interim tariff for FY2023-24. The Authority has duly determined the consumer-end tariff for FY2023-24 based on these submissions.

Revenue Requirement and Future Consumer Benefits

According to the press release, the projected total revenue requirement for ex-Wapda distribution companies (Discos) is Rs3,281 billion for the current fiscal year. This projection considers the anticipated sales of 110,165 gigawatt-hours. Any relief resulting from a decrease in the tariff, such as rupee appreciation, decreased inflation, or interest rates, will be directly transferred to consumers in the future.

Fuel Cost Adjustment for K-Electric Consumers

In a separate notification, Nepra announced an increase of Rs1.45 per unit for K-Electric (KE) consumers concerning fuel cost adjustment (FCA) for electricity consumed in May. This adjustment applies to all consumers except lifeline consumers and should be reflected in their July bills. KE has been granted permission to recover the FCA amount in the bills issued in August for those consumers whose bills were generated before the notification was released.

By consistently reviewing and adjusting the power tariff, Nepra aims to maintain a stable and sustainable energy sector in Pakistan.

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