ISLAMABAD: The government is set to announce a significant tariff relief across the country, as Power Distribution Companies (Discos) have requested a negative adjustment of up to Rs. 52.123 billion (about Rs. 2 per unit) in the Quarterly Tariff Adjustment (QTA) for the second quarter of FY 2024-25.
The National Electric Power Regulatory Authority (Nepra) is scheduled to hold a public hearing on February 12, 2025, regarding the petition filed by Discos through the Central Power Purchasing Agency Guaranteed (CPPA-G). Of the total requested negative adjustment of Rs. 52.123 billion, Rs. 50.658 billion is attributed to the exchange rate difference (Rs. 278/$ versus the projected Rs. 300/$) and a reduction in interest rates. The QTA will affect electricity tariffs for the months of March, April, and May , with the existing Rs. 0.19 per unit QTA set to expire on February 28, 2025.
In addition, Prime Minister is expected to announce a further reduction of Rs. 7 per unit for consumers, particularly for the industrial sector, starting in April 2025. This implies that the total reduction will be around Rs. 9-10 per unit from April onward, driven by capacity payments to Independent Power Producers (IPPs) and Government Power Plants (GPPs).
The government claims that the termination of power purchase agreements (PPAs) for five IPPs, along with the revision of contracts for eight bagasse-fired IPPs and 15 other IPPs, will result in annual savings of Rs. 137 billion. These savings, part of a broader effort to reduce energy costs by Rs. 1.14 trillion, will be passed on to consumers. The new contracts have already been approved by the Federal Cabinet.
According to data shared with Nepra, the following adjustments have been requested by Discos for the second quarter: Islamabad Electric Supply Company (IESCO) has sought negative adjustment of Rs 4.478 billion for the second quarter ; Lahore Electric Supply Company (LESCO) Rs 9.632 billion, Gujranwala Electric Power Company (GEPCO) Rs 6.498 billion , Faisalabad Electric Supply Company (FESCO) Rs 10.989 billion, Multan Electric Power Company (MEPCO) Rs 10.628 billion, Peshawar Electric Supply Company (PESCO) Rs 2.218 billion, Hyderabad Electric Supply Company (HESCO) Rs 427 million, Quetta Electric Quetta Supply Company (QESCO) Rs 1.772 billion, Sukkur Electric Supply Company (SEPCO) Rs 3.024 billion and Tribal Electric Supply Company (TESCO) Rs 3.309 billion. The total requested amount for variable O&M is Rs 2.691 billion, Use of System Charges (UoSC) Market Operator Fee (MOP) Rs 1.326 billion and impact of incremental units was recorded at Rs Rs 166 million.
According to NEPRA, in the light of policy guidelines issued by the federal government for application of uniform quarterly adjustments, the 3rd quarterly adjustment for FY 2024-25 of Discos to be determined by the Authority, shall also be applicable on the consumers of K-Electric.
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