Electricity Prices Set to Surge as NEPRA Increases Rates by Rs. 1.7 Per Unit

Prepare yourselves for a jolt as NEPRA announces a spike in electricity bills across Pakistan. Brace for a hike of Rs. 1.7 per unit in your electricity bills for the upcoming months of September and November.

Rising Costs: NEPRA’s Adjustment Adds 1.743 Per Unit to Electricity Bills

Adding to the woes of inflation-hit citizens, a fresh increment of Rs. 1.743 per unit will further burden millions of households over the next three months starting September 2024.

Under the latest adjustment, distribution companies, including K-Electric, are slated to recover a staggering Rs. 43.23 billion for the fourth quarter of the fiscal year 2023–2024 through quarterly revisions. This move is bound to strain households already grappling with soaring energy bills.

Consumers to Bear Rs. 51 Billion Surge Due to Power Costs and GST

The lion’s share of the recovery amount will go towards capacity charges for independent power producers to maintain their electricity generation capabilities. An additional Rs. 7.3 billion is allocated for market operator fees and system usage charges, Rs. 11.23 billion for compensating transmission and distribution losses, and Rs. 3.5 billion for variable operation and maintenance expenses.

With the imposition of an 18% general sales tax on the recovery sum, the total burden on consumers will escalate to Rs. 51 billion, exerting a Rs. 7.78 billion strain on the economy.

NEPRA Turns Down Rs. 51 Million Legal Cost

NEPRA Chairman representing distribution companies highlighted the necessity for adjustments due to lower-than-projected sales for the quarter. The authority cited load-shedding by certain entities like Pesco, attributing it to unmet energy demands.

While the Central Power Purchasing Agency sought an additional Rs. 51 million for legal expenses, NEPRA rejected the plea, citing existing coverage for legal costs under the Market Operation Fee (MOF) already allotted Rs. 500 million for legal fees in the fiscal year 2023–2024.

Positive Adjustment Granted by NEPRA – Rs. 43.23 Billion

NEPRA also dismissed Kot Addu Power Company’s Rs. 72.23 million tax differential claim recorded by the CPPA. Further, Rs. 73.18 million underwent revision to account for the January 2024 PPIB fee.

NEPRA has granted a positive adjustment of Rs. 43.23 billion for the fourth quarter of FY 2023–2024 to cover capacity charges, variable operation and maintenance costs, increased recovery from escalated sales, system usage charges, market operator fees, and other financial cost adjustment impacts.

Conclusion

NEPRA’s recent decision to hike electricity rates by Rs. 1.7 per unit spells tough times ahead for consumers nationwide. With additional charges for capacity payments, operational costs, transmission losses, and the introduction of an 18% GST, consumers are staring at a collective burden of Rs. 51 billion.