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Electricity rates increased for 6 months

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In Islamabad, the National Electric Power Regulatory Authority (Nepra) has granted permission for both state-run power distribution companies (Discos) and K-Electric to raise electricity rates by Rs3.28 per unit for the upcoming six months, beginning from October 2023 to March 2024.

During this period, all consumers will experience an additional charge of Rs3.28 per unit, which is attributed to the fourth quarterly adjustments for FY23 (April-June 2023), as reported by The News.

This rate increase is primarily due to fluctuations in capacity charges, Variable O&M, additional recovery related to incremental sales, Use of System Charges, Market Operator Fee, and the impact of fuel charge adjustment (FCA) on transmission and distribution (T&D) losses.

In total, all Discos and K-Electric are expected to collect nearly Rs183 billion, including GST, over these six months. Excluding GST, Discos’ collections will amount to Rs135.58 billion, while K-Electric is set to charge up to Rs20 billion.

Interestingly, out of this collection (excluding GST), more than Rs130 billion will go towards paying capacity charges to Independent Power Producers (IPPs).

It’s important to note that no quarterly adjustments will be imposed on Bl, B2, B3, and B4 industrial consumers for the additional incremental sales until the continuation of the package, as per the Authority’s decision made on December 01, 2020.

On August 24, 2023, Nepra conducted a public hearing regarding the petition filed by the companies. During the hearing, a representative from the Ministry of Energy suggested that the proposed quarterly adjustment be spread over a period of six months to minimize its impact on consumers.

The ministry estimated that the impact would be approximately Rs3.55 per unit if spread over six months, as opposed to Rs6.20 per unit if passed on to consumers over three months.

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