Wapda seeks hike in tariff by up to Rs4.15 per unit

Khalid Mustafa
Friday, Aug 05, 2022

ISLAMABAD: Wapda here on Thursday asked for an increase in its bulk tariff by up to Rs4.15 per unit for the financial year 2022-23 against its existing tariff of Rs3.68 per unit. Wapda sought the hike in tariff based on the revenue requirements for the current fiscal that has been worked out at Rs121.808 billion.

NEPRA held the hearing and listened to Wapda’s arguments and also raised some pertinent questions. The regulator announced that it will announce its determination after thorough due diligence of the data provided by the petitioner.

As per the petition, electricity end consumers will have to pay in the tariff an amount of Rs34.645 billion in the financial year 2022-23 in the head of Net Hydel Profit (NHP) of Rs20.354 billion for KPK government, Rs8.7 billion for Punjab, water use charges of Rs5.44 billion to AJK government and Rs157 million as IRSA charges. Wapda claimed that it will generate 31.353 billion units in 2022-23.

Wapda also pleaded that the O&M expenses will cost Rs23.616 billion in ongoing fiscal, depreciation on repayment of loans and equity will amount to Rs8.025 billion and it expects that it will reap a return of Rs64.65 billion on investments made on hydropower stations and projects along with other income of Rs767 million. “And there will be an estimated revenue gap of Rs26.285 billion,” says the Wapda petition.

However, NEPRA’s case officer raised 14 issues during the hearing and questioned Wapda’s demands for seeking O&M amounting to Rs23.616 billion, depreciation charges at Rs8.025 billion, return on power stations at Rs30.385 billion and power projects at Rs34.265 billion. The case officer of the regulator also raised the issue of other income of Rs767 million claimed by Wapda, revenue gap of Rs26.282 billion and payment of Net Hydel Profit at the uniform rate of Rs1.10 per unit.

NEPRA also questioned during the hearing whether PPRA guidelines/rules were followed during the procurement of goods/services under the project/plants. Whether the claims under Tariff Petition are eligible payments i.e. as per approved PC-I/approved contracts and government policies in vogue. And whether it is justified to consider higher tariffs for small hydel plants being inefficient and with low plant factor.

The regulator also touched on more issues, saying if it was justified to consider capacity payment/ hydrology risk for the plant for which full water discharge is otherwise available but the available water cannot be utilized due to delay in maintenance/design issues. If the actual generation for FY2021-22 and projected generation for FY2022-23 is justified. And whether the expected annual generation and other technical parameters, claimed cost and construction period for ongoing development projects under CWIP are justified. Wapda tried to satisfy the Authority, but the regulator announced that it will announce its verdict on the petition after some days following due diligence of the data provided by Wapda.