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Wapda to fleece Rs 57 bn from consumers

20 December, 2013

ISLAMABAD: In another blow to the double digit inflation-stricken masses, the National Electric Power Regulatory Authority (Nepra) has increased the tariff of electricity being produced by Wapda by 33 percent for 2013-14.

This will enable Nepra to collect Rs57 billion additional revenue from power consumers. The Wapda tariff has been increased with an immediate effect. According to the reports, the electric power regulator has increased the tariff of electricity by 33 percent being produced by the Wapda Hydel Company.

The regulator has increased the average tariff of 19 Wapda projects to Rs1.79 per unit from the existing Rs1.35 per unit, resulting in an increase by Re0.44 per unit.The regulator has accorded approval to Rs7.44 billion as operating and maintenance cost for the current fiscal year 2013-14, Rs6 billion as net hydel profit that Khyber Pakhtunkhwa (KPK) receives from Wapda every year, Rs742 million as water uses, Rs159 million as Irsa (Indus River System Authority) charges and return on investment Rs 31.26 billion. The regulator also approved the difference in revenue collection of Rs8.80 billion for the financial years 2011-12 and 2012-13.

With the said raise in tariff, as per the document, Wapda will get additional revenue of Rs 57 billion only for one year and after that the tariff will tumble by Re0.27 per unit to Rs1.52 per unit.

However, the provincial government of Khyber Pakhtunkhwa has submitted its reservations on Rs 6 billion as net hydel profit by the petitioner for tariff calculations saying KPK has been provided Rs 6 billion for many years despite the fact that the dispute of capping of net hydel profit has been resolved by a high powered committee headed by the Federal Special Secretary Finance and decisions of the committee were duly endorsed by the Federal Finance division and circulated vide letter dated March 16, 2013.

The KPK has submitted that in terms of the aforesaid decision, the petitioner is bound to charge net hydel profit @ Rs. 1.10 per kWh on its total expected net electrical output that is to be indexed @ 5% per annum. The government of Khyber Pakhtunkhwa has accordingly requested the Authority that while determining the annual revenue requirement of the petitioner, net hydel profit @ Rs. 1.10 per kWh may be accounted for and tariff may be adjusted accordingly.

However, according to the documents, National Electric Power Regulatory Authority said that the issue of net hydel profit as per provisions of the Article 161 (2) of the Constitution of the Islamic Republic of Pakistan was discussed in detail in the previous determinations of the Authority.

The Authority observed that CCI, which was the appropriate forum to decide about the issue of net hydel profit, had not taken any decision on this issue. In view of the aforesaid, the Authority has decided to maintain its previous position on the issue of net hydel profit, and leaves the matter of net hydel profit to be resolved by the CCI.Accordingly, the Authority allows Rs 6 billion per annum to the petitioner on account of payment of net hydel profit on interim basis as per request of the Wapda.


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