The upcoming hearing, scheduled for August 26, will allow NEPRA to review the details of the request and assess the justification for the proposed increase in electricity rates
ISLAMABAD: Electricity distribution companies have recently submitted a significant request to the National Electric Power Regulatory Authority (NEPRA) to transfer a financial burden of Rs 46.99 billion to consumers. This request is related to the last quarter of the previous financial year and includes several components that contribute to the proposed increase in electricity tariffs.
The distribution companies are seeking Rs 22.86 billion for capacity payments. These payments are intended to cover the costs associated with maintaining power generation capacity, ensuring that enough electricity is available to meet demand even if generation units are not in constant operation. An additional Rs 4 billion is being requested to cover operations and maintenance expenses. This amount is allocated for the ongoing upkeep of power infrastructure and operational activities necessary for reliable electricity supply.
The companies have requested Rs 7.51 billion for use of system charges and marketing fees. Use of system charges relate to the costs of utilizing the transmission and distribution networks, while marketing fees cover expenses associated with customer acquisition and retention. The request includes Rs 10.80 billion for covering transmission and distribution losses. These losses occur when electricity is lost during transmission from power plants to consumers due to technical inefficiencies and system constraints. The upcoming hearing, scheduled for August 26, will allow NEPRA to review the details of the request and assess the justification for the proposed increase in electricity rates.
This decision will also affect K-Electric, which operates in Karachi and is included in the scope of the tariff adjustment. This proposed tariff adjustment has significant implications for consumers, as it aims to recover substantial costs incurred by the distribution companies. The outcome of the hearing will determine whether these costs will be passed on to consumers through higher electricity bills. The situation highlights ongoing challenges in managing the financial aspects of electricity distribution and the impact of these challenges on end users.
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