ISLAMABAD   -  National Electric Power Regulatory Authority(NEPRA) will conduct public hearing next week on the Water and Power Development Authority’s petition for increase of Rs1.65 per unit in electricity tariff from the WAPDA hydel power stations to meet its revenue requirement of Rs177.518 billion for the fiscal year 2020-21.

In its petition for tariff revision submitted in August 2020, Water and Power Development Authority had requested NEPRA for the increase of Rs 1.65 per unit in power tariff and now NEPRA has set November 12 date for hearing. As per the petition for the revision of tariff for 2020-21 for bulk supply of power from the WAPDA hydel power stations, submitted to National Electric Power Regulator Authority (NEPRA), WAPDA has requested an increase of Rs1.65 per unit in tariff from the current Rs5.67 to Rs 7.32 per unit.

In its petition, WAPDA had claimed total revenue requirement of Rs177.528 billion for the current fiscal which is Rs106.169 billion higher than the revenue requirement determined by NEPRA for the fiscal year 2017-18. The total claimed O&M cost for the current fiscal is Rs19.724 billion which is almost 25 per cent higher than the determined O&M cost of the NEPRA for FY2017-18. The determined O&M cost for 2017-18 was Rs14.092 billion. The claimed depreciation is Rs7.728 billion for 2020-21 which was Rs5.917 billion during 2017-18. For Ijara Rental (Sukuk Bonds Repayment) Rs1.690 billion were claimed which was Rs2.589 billion in the NEPRA’s determination of 2017-18.

Similarly, the return on investment for power stations claimed by WAPDA is Rs37.163 billion against the NEPRA determined Rs28,176 billion for 2017-18. Return on investment for power project is claimed to be Rs32.085 billion against the NEPRA’s determined Rs 12.374 billion. In its petition, WAPDA has claimed an estimated generation (Net GWH) of 30,140 GWh which is less than NEPRA determined 33598 GWh for the fiscal 2017-18. Similarly, WAPDA has claimed that the total Regular Hydel Levies for 2020-21 are Rs36,599 billion which are higher than the NEPRA’s determined Rs32,894 billion.

As per the petition, the proposed Regular Hydel Levies (NHP) of KP in 2020- 21 are Rs21.156 billion, while the Nepra determined NHP for the 2017-18 were Rs 21825 billion. The proposed Regular Hydel Levies (NHP) of Punjab in 2020- 21 are Rs 9.539 billion while the Nepra’s determined NHP were Rs 10.002 billion. For the AJK water use charges (WUC), WPADA has proposed Rs 5.753 billion for 2020-21 against the NEPRA determined Rs 899 million for 2017-18.  For 2020-21, the total proposed NHP arrears are Rs6.460 billion against the NEPRA determined arrears of Rs86.263 billion for 2017-18. As per the petition, the total regular and arrears of NHP for 2020-21 are Rs43.058 billion while NEPRA has determined Rs119.157 billion for 2017-18. 

The hearing will be based on 11 main questions including whether petitioner’s request for allowance of O&M expense amounting to Rs 15,165 million, Rs 20,136 million, Rs 19,079 million and Rs 19,724 million for FY 2018, 2019, 2020 & 2021 respectively is justified? Whether petitioner’s request for allowance of depreciation charge and ljara rentals amounting to Rs 7,616 million, Rs 9,284 million, Rs 9,433 million and Rs 9,418 million for FY 2018, 2019, 2020 & 2021 respectively is justified? Whether mark-up on NHP loans amounting to Rs. 11,024 million is justified? Whether the inclusion of 64% Diamir Basha Dam cost (WACC based return) as claimed by the petitioner to be made a part of WAPDA hydroelectric’s tariff is justified? Whether petitioner’s request for allowance of WACC based return on power stations amounting to Rs 25,468 million, Rs 31,585 million, Rs 37,367 million and Rs 37,163 million for FY 2018, 2019, 2020 & 2021 respectively is justified? 

Whether petitioner’s request for allowance of WACC based return on investment on power projects amounting to Rs 27,109m, Rs22,314m, Rs21,500m and Rs 32,085 million for FY 2018, 2019, 2020 & 2021 respectively is justified? Whether other income claimed to be Rs1,374m for FY 2018 and Rs697m each for FY 2019 to FY 2021 is justified? Whether petitioner’s request for allowance of regulatory gap amounting to Rs17,675m, Rs20,950m & Rs23,600m and for FY 2018, 2019 & 2020 respectively is justified?

 Whether the plant wise outages schedule claimed in the petition is justified? Whether the claimed capacity of power plants is justified in the absence of capacity tests as per PPAs? Whether the current mechanism for allocation of costs/expenses for each of the project into water side and power side is justified?