Discos proposes massive hike in electricity bills amid inflation

Ex-Wapda distribution companies Discos proposes a massive hike of 7.13 rupees per unit in electricity bills to the National Electric Power Regulatory Authority (NEPRA).

The request for Nepra approval comes amid a significant decrease in hydropower production and systematic challenges. It includes the inability of a high voltage direct current (HVDC) transmission line to effectively move economically viable power from southern producers to the north. It resulted in a significant financial burden on customers.

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As a result, the South has used fewer cost-effective energy sources. Instead, it relies on more expensive alternatives such as high-speed diesel and residual fuel oil. Increased gasoline costs are one aspect leading to these high prices.

Meanwhile, Nepra has scheduled a public hearing for Feb 23, 2024, to review the Central Power Purchasing Agency’s (CPPA) petition. CPPA presented this petition on behalf of Discos.

Discos companies claimed a Rs. 2.568 billion recovery from earlier adjustments out of total demand. According to the petition, electricity generation was 8,314 gigawatt-hours (GWh) in January 2024 for Rs. 114.634 billion (equal to Rs. 13.7885 per unit).

Discos proposes massive hike in electricity bills

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Furthermore, 7,938 GWh valued at Rs. 116.06 billion were transferred to distribution companies Discos. It includes transmission losses at 4.27% (or 352 GWh) of total generation. It was 3.51% (298GWh) in December and January 2023.

This shows electricity generation fell by 2.4% compared to the same month last year when 8,515 GWh were generated. However, the generation rose by 7.6% in December 2023. Surprisingly, it was 4.7% lower than the baseline during this month.

This drop in electricity generation is expected to result in higher electricity bills during the third quarter of the fiscal year 2024 QTA (Quarterly Tariff Adjustment). Discos proposes a massive hike in electricity bills to be implemented in March 2024.