NEPRA raises national average tariff by Rs4.96/kWh for FY23-24

July 15, 2023 (MLN): The revised national average tariff for the fiscal year 2023-24 has been increased by Rs4.96 per kilowatt hour (kWh) to Rs29.78/kWh, compared to the previous national average tariff of Rs24.82/kWh, as per the latest notification by National Electric Power Regulatory Authority (NEPRA).

The increase is attributed to various factors such as low sales growth, PKR devaluation, high inflation, exorbitant interest rates, and the addition of new capacities.

In a recent development, the NEPRA has determined the revised consumer-end tariffs for distribution companies (DISCOs) for the fiscal year 2023-24.

The decision comes as each distribution company has different revenue requirements and allowed different levels of Transmission and Distribution (T&D) losses.

NEPRA's determination takes into account all these necessary factors to ensure a fair and sustainable tariff structure.

Once the entity finalizes the tariffs, they are intimated to the Federal Government, to file the tariff application.

The finalized tariff, which incorporates subsidies or surcharges as enforced by the government, is then made public, highlighting charges implied on consumers.

Several distribution companies, including Multan Electric Power Company(MEPCO), Gujrat Multan Electric Power Company (GEPCO), Hyderabad Electric Supply Company (HESCO), Sukkur Electric Power Company (SEPCO), Qatar Engineering Projects Company (QESCO), Peshawar Electric Supply Company (PESCO), and Tribal Areas Electric Supply Company (TESCO), have filed adjustment/indexation requests under the multi-year tariff regime for the upcoming fiscal year.

Additionally, Islamabad Electric Supply Company (IESCO), Lahore Electric Supply Company (LESCO), and Faisalabad Islamabad Electric Supply Company (FESCO) have filed multi-year tariff petitions covering the period from FY23-24 to FY27-28, and have also requested an interim tariff for the current FY.

Taking into consideration these petitions and requests, NEPRA has determined the consumer-end tariffs for FY23-24.

It is important to note that the increase in tariffs is a response to the challenges faced by the power sector.

The total revenue requirement projected for the DISCOs in FY23-24 is estimated at Rs3.281 trillion, with projected sales amounting to 110,165 GWh.

However, any future relief or decrease in tariffs will be directly transferred to consumers in the event of PKR appreciation, decreased inflation, or lower interest rates.

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