ISLAMABAD - The National Electric Power Regulatory Authority (Nepra) on Thursday reserved its judgment on Rs1.65 per unit increase in hydropower tariff for current fiscal year by Wapda and also refused the authority’s request to transfer the burden of Rs 11 billion interest to power consumers.
In its original petition, WAPDA had sought around Rs1.65 per unit increase in hydropower tariff for current fiscal year, however during public hearing the authority has downward revised its claim for tariff increase to Re 0.93 per unit based on revised estimates.
In NEPRA’s public hearing presided over by Chairman Nepra Tauseef H Farooqui, the Wapda management downward revised its demand for tariff increase to Rs 0.93 per unit based on revised estimates.
Chairman NEPRA said that the decision over the Wapda request of Rs 0.93 per unit tariff increase would be made after detailed examination of data and they would try to further cut down the demanded increase.
The hearing was informed by Wapda’s officials that back in 2015, the federal government had decided to allow Rs1.10 per unit hike on account of net hydle profit to Khyber Pakhtunkhwa.
Currently, Wapda hydle tariff is Rs5.67 per unit and in its petition submitted with NEPRA back in August this year, the Authority had sought an increase of Rs1.65 per unit which would have taken the tariff to Rs7.32 per unit. However, following the government effort to reduce capacity charges, Wapda has now revised its request and sought an increase of Rs 0.93 per unit. The increase, if allowed, will jack up the hydle tariff from the existing Rs 5.67 per unit to Rs6.60 per unit. The required increase was necessary on account of NHP and water use charges. It was informed that out of the current Rs 5.67 per unit hydle power charges more than Rs 3 per unit is the cost of NHP and WUC.
Currently, Wapda has hydropower plants of about 8000MW while around 9000MW of power plants were under construction.
Tauseef H Farooqui noted with surprice that Wapda was paying NHP to provinces through bank borrowing. Chairman NEPRA asked that what kind of financial prudence allows payment of profits through borrowing and then its interest is also charged to consumers.
Chairman NEPRA said that the authority would not allow Rs11 billion interest on these debts to be charged to consumers. He said the Wapda should take up the matter with the Finance Division to secure debt servicing cost through budget or any other mechanism “but we can’t be accomplice in this crime”.
According the Wapda’s petition for increase of Rs1.65 per unit in electricity tariff the authority had projected its revenue requirement of Rs177.518 billion for the fiscal year 2020-21.
In its petition for tariff revision submitted in August 2020, for the revision of tariff for 2020-21 for bulk supply of power from the Wapda hydel power stations, the authority had 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 21.825 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.