ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has approved KE’s average power supply tariff of Rs 39.97 per unit for FY 2023-24 Multi Year Tariff (MYT) for the period from 2023-24 to FY 2029-30.
This includes power purchase excluding transmission cost of Rs 31.96 per unit, transmission cost of Rs 2.86 per unit, distribution cost Rs 3.31 per unit, supply margin Rs 2.28 per unit and Prior Year Adjustment negative Rs 0.44 per unit.
The power utility company’s total revenue requirement is estimated to be Rs 606.920 billion, for FY 2023-24, of which supply margin will be Rs 34.681 billion, O&M cost Rs 5.91 billion, working capital negative Rs 1.244 billion, recovery loss, Rs 36.253 billion, gross margin Rs 40.921 billion, other income negative Rs 6.240 billion, net margin Rs 34.681 billion and prior year adjustment negative Rs 6.690 billion.
The Authority also considering the fact that FY 2023-24 has already lapsed and FY 2024-25 is almost 10 months gone, also obtained ICE’s actual recovery ratios for the FY 2023-24 and FY 2024-25. As submitted by KE its actual recovery for the FY 2023-24 remained at 91.50%, whereas FY 2024-25 is expected to close at 90.50%. The financial impact of under recovery of 8.50% for FY 2023-24 and 9.50% for FY 2024-25, as reported by KE, is around Rs.40 billion and Rs.57 billion respectively. The Authority noted that return allowed to KE for its distribution function is around Rs.21.6 billion, meaning thereby that effectively KE would be incurring losses for the first 02 years of MYT, if no recovery loss is allowed to KE. This may compromise the financial viability of the company, which is neither in the interest of the consumers nor power system as whole.
In view of the discussion, and to ensure sufficient liquidity in the power market, and to align the collection targets with current market realities, the Authority has decided to allow recovery loss to K-Electric as per the following targets for the Iv[Y1′ control period from FY 2023- 24 to FY 2029-30; (i) 93.25 per cent in 2023-24, 93.60 per cent in 2024-25, 94.40 per cent in 2025-26, 95.19 per cent in 2026-27, 95.70 per cent in 2027-28, 90.10 per cent in 2028-29 and 96.50 per cent in 2029-30.
According to a spokesperson of KE any change will not affect the end consumers as the government has to pick up subsidy due to uniform tariff across the country.
Ends
