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SOHAIL IQBAL BHATTI — UPDATED about 6 hours ago
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Nepra declares ECC's policy guidlines to include Rs417 billion as tariff for FY 2014-15 contrary to Nepra Act. -AFP/File
ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has decided not to pass on Rs417 billion burden to power consumers and declared the policy guidelines issued by the cabinet's economic coordination committee (ECC) as contrary to the Nepra Act.
Official documents, available with DawnNews, reveal that according to Nepra, policy guidelines issued by the ECC to include Rs417 billion in tariff for fiscal year 2014-15 are not in accordance with the Nepra Act and are thus unacceptable.
The authority (Nepra) has now categorically declined to pass on the heavy burden of loan to power consumers. The loans were obtained to control circular debt and power theft.
“Guidelines are not in line with the spirit of the Act and specifically the principles enunciated under section 31 of the Act read with rule 17 ibid and are therefore not acceptable,” the official document said.
Nepra’s letter to the Ministry of Water and Power, a copy of which is available with DawnNews, said: “While assessing the consumers-end tariff of the XWDISCOs (power distributing companies), the authority considers all the relevant costs i.e. generation, transmission and distribution for supply of electricity to ultimate users but allows only prudently incurred cost. The principles of prudence, justice, and fairness requires that while allowing any cost the inefficiencies of XWSISCOs should not be made part of consumer-end tariff.”
“In view thereof, the T& D losses of each DISCO for the FY 2013-14 were approved by the Authority after considering the annual tariff petitions and subsequently their motion for leave for review, in accordance with the provisions of the NEPRA Act and Rules made there under. It is to be noted that Nepra makes its assessment on the basis of individual DISCO; therefore the overall losses number is not calculated,” the document stated.
Documents further disclose that a total of Rs295 billion were obtained from banks in lieu of loans for electricity generation, while the incumbent regime has obtained Rs40 billion in loans to mitigate Pakistan State Oil's (PSO) crises. Also, a markup of Rs37 billion is applicable on theses obtained loans.
Earlier, during financial year 2013-14, Nepra decreased collection ratio from consumers of electricity losses (power theft) to 13.02 percent from 18.60 percent following which, collection of Rs45 billion was stopped.
Similarly, the power ministry, by approving policy guidelines from the federal cabinet’s economic coordination committee advised Nepra to include Rs417 billion as tariff for FY 2014-15.
“In view of the foregoing facts, it is informed that subject guidelines are not in line with the spirit of the Act and specifically the principles enunciated under section 31 of the Act read with rule 17 ibid and are therefore not acceptable. However, for future, it is strongly recommended that GOP being owner of XWDISCOs must push all the companies to complete their studies of T&D losses and submit the same to the Authority, ideally before submitting their next tariff petitions,” Nepra letter reads.
4 COMMENTS
PRINT
Nepra declares ECC's policy guidlines to include Rs417 billion as tariff for FY 2014-15 contrary to Nepra Act. -AFP/File
ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has decided not to pass on Rs417 billion burden to power consumers and declared the policy guidelines issued by the cabinet's economic coordination committee (ECC) as contrary to the Nepra Act.
Official documents, available with DawnNews, reveal that according to Nepra, policy guidelines issued by the ECC to include Rs417 billion in tariff for fiscal year 2014-15 are not in accordance with the Nepra Act and are thus unacceptable.
The authority (Nepra) has now categorically declined to pass on the heavy burden of loan to power consumers. The loans were obtained to control circular debt and power theft.
“Guidelines are not in line with the spirit of the Act and specifically the principles enunciated under section 31 of the Act read with rule 17 ibid and are therefore not acceptable,” the official document said.
Nepra’s letter to the Ministry of Water and Power, a copy of which is available with DawnNews, said: “While assessing the consumers-end tariff of the XWDISCOs (power distributing companies), the authority considers all the relevant costs i.e. generation, transmission and distribution for supply of electricity to ultimate users but allows only prudently incurred cost. The principles of prudence, justice, and fairness requires that while allowing any cost the inefficiencies of XWSISCOs should not be made part of consumer-end tariff.”
“In view thereof, the T& D losses of each DISCO for the FY 2013-14 were approved by the Authority after considering the annual tariff petitions and subsequently their motion for leave for review, in accordance with the provisions of the NEPRA Act and Rules made there under. It is to be noted that Nepra makes its assessment on the basis of individual DISCO; therefore the overall losses number is not calculated,” the document stated.
Documents further disclose that a total of Rs295 billion were obtained from banks in lieu of loans for electricity generation, while the incumbent regime has obtained Rs40 billion in loans to mitigate Pakistan State Oil's (PSO) crises. Also, a markup of Rs37 billion is applicable on theses obtained loans.
Earlier, during financial year 2013-14, Nepra decreased collection ratio from consumers of electricity losses (power theft) to 13.02 percent from 18.60 percent following which, collection of Rs45 billion was stopped.
Similarly, the power ministry, by approving policy guidelines from the federal cabinet’s economic coordination committee advised Nepra to include Rs417 billion as tariff for FY 2014-15.
“In view of the foregoing facts, it is informed that subject guidelines are not in line with the spirit of the Act and specifically the principles enunciated under section 31 of the Act read with rule 17 ibid and are therefore not acceptable. However, for future, it is strongly recommended that GOP being owner of XWDISCOs must push all the companies to complete their studies of T&D losses and submit the same to the Authority, ideally before submitting their next tariff petitions,” Nepra letter reads.
