NEPRA raises Power Tariffs on account of retrograde fuel adjustment

Wednesday, May 23, 2012: Pakistan’s National Electric Power Regulatory Authority (Nepra) has once again raised the power tariffs by up to Rs1.79 per unit on account of nostalgic fuel adjustment for the months of February and March

The increased tariffs will be reflected in bills that all consumers, except the lifeline ones, receive in September and October 2012.

As per the notification issued, Nepra has raised power tariff by Rs0.59 per unit to recover the fuel cost for February that would be reflected in September. The authority has also hiked the tariff by Rs1.79 per unit to recover
the fuel cost for the month of March that would be recovered in October.

In dissenting notes against the decisions, Nepra member Shaukat Ali Kundi said that inefficiencies in and mismanagement of public sector generation companies (Gencos) persist and generation cost burden continues to increase.

“I am, therefore, inclined not to pass on any undue burden to the consumers,” Kundi said.

He said that public sector Gencos were given certain directives by Nepra to reduce generation costs and protect consumers from unwarranted burden caused by mismanagement of the service providers, but all in vain.

The declining performance of public sector Gencos is not only aggravating load-shedding in the country, but also causing a huge loss to the exchequer, Kundi said.

These Gencos are not making any serious effort to improve their operational performance,” he added.

A committee assigned to carry out a study determined that the accumulated loss on account of inefficiencies in Gencos was around Rs25.874 billion during 2007 and 2009.

While Nepra has not allowed for these losses to be passed on to the consumers, they are borne by the respective companies and their 100% shareholder, the government of Pakistan.

“This is something very alarming … the government must take notice of these losses caused to the national exchequer, and make a thorough probe into these losses and its recovery thereof,” Kundi added.