In a recent development, the National Electric Power Regulatory Authority (NEPRA) has given the green light to an increase in electricity tariffs by Rs5.40 per unit. This uptick comes as part of the quarterly adjustment and is set to impact the pockets of consumers.
NEPRA stated that due to the existing structure of electricity distribution companies, it is currently not feasible to offer any respite to consumers in terms of reduced rates. However, it’s worth noting that this increased tariff will exclude lifeline and K-Electric consumers, providing them a temporary shield from the price hike.
This decision follows a hearing wherein distribution companies put forward an application to NEPRA for a tariff increase of Rs5 per unit. The application, submitted for the fourth quarter adjustment of the fiscal year 2022-23, revealed substantial financial demands from various companies.
FESCO, for instance, sought an increment of Rs23.49 billion, while GEPCO requested Rs16.13 billion. Similarly, both HESCO and IESCO applied for a raise of Rs9 billion each.
LESCO, MEPCO, PESCO, QESCO, SEPCO, and TESCO also submitted their petitions for tariff hikes, ranging from Rs31 billion for LESCO to Rs4 billion for TESCO. These increases are expected to take effect during September, October, and November, with consumers shouldering an additional financial burden of Rs5.40 per unit.
The distribution companies, collectively known as DISCOs, justified their applications by pointing out revenue losses due to reduced industrial demand. LESCO, in particular, faced a significant setback, experiencing a shortfall of three billion units of electricity due to a combination of climate change and industry shutdowns. This has resulted in a decline in electricity demand by approximately 1,000 megawatts compared to the previous year.
HESCO, another distribution company, saw an escalation in capacity charges due to the ongoing industry shutdowns and the subsequent decline in electricity consumption.
Adding to the concerns, DISCOs highlighted that they are currently grappling with a backlog of 350,000 pending connections, further straining their financial situation. To manage the reduced demand and enhance recovery, surcharges of Rs7.91 were implemented, as confirmed by the Central Power Purchasing Agency.
Read more: US Dollar Maintains Historic High Rate, Exerting Pressure on Rupee
As the tariff increase takes effect in the coming months, consumers across the board will need to prepare for higher electricity bills. While the exclusion of lifeline and K-Electric consumers offers some relief, the general population should brace themselves for the impact of these heightened rates during the specified quarter adjustment period.
