NEPRA approves Rs2.84/unit tariff hike for Discos

The National Electric Power Regulatory Authority (NEPRA) has given the green light to ex-WAPDA distribution companies (Discos) to raise the electricity tariff by Rs2.84 per unit for the upcoming month of March 2024. This adjustment, approved by NEPRA, will lead to an additional cost of Rs26 billion for consumers in their next electricity bills. The increase in tariff is primarily due to fluctuations in fuel charges and other necessary adjustments.

The Central Power Purchasing Agency (CPPA) had put forth the request for the tariff hike, citing higher energy delivery expenses in comparison to the reference fuel charges. Following a public hearing on the matter, NEPRA granted approval for the increase, pointing out a decline in electricity generation and the under-utilization of specific power plants as key contributing factors.

During the hearing, CPPA-G elaborated on the reasons behind the reduction in overconsumption, the low utilization of Thar coal power plants, and the financial implications of operating Guddu 747 on an open cycle. Additionally, they emphasized the energy supplied through net-metering and requested previous adjustments amounting to Rs7,615 million.

NEPRA's decision encompasses permitting the additional costs for energy supplied by Tavanir Iran and GENCO-II on a provisional basis, subject to further adjustments. The Authority stressed the importance of conducting additional studies to minimize part load charges and enhance the efficiency of power plant utilization to ensure system stability and meet demand requirements.

The approval of the tariff increase by NEPRA for March 2024 reflects the ongoing challenges in the energy sector, particularly concerning fuel costs and operational efficiencies. Moving forward, it is crucial for stakeholders to collaborate on implementing strategies that promote sustainable energy practices and address the evolving demands of the power grid.