The determination, a copy of which was provided exclusively to Business Recorder, may block the recent decision of Economic Co-ordination Committee (ECC) of the Cabinet, in which the federal government approved a subsidy of Rs 730 million to offset the impact of not notifying increase in tariff from November 2004 to end-June 2005.
KESC had submitted tariff adjustment application on October 6, according to which the variation in fuel cost due to fuel price variation and generation mix came to Rs 2195, or 23.09 paisa per unit.
Nepra in its determination said that the data submitted by KESC had been verified and after scrutiny the amount of variation in fuel cost due to fuel price variation worked out Rs 2157, or 22.68 paisa per unit. The amount of variation in cost of power purchase worked out at Rs 426 million, or 4.48 paisa per unit, on which the combined effect had been calculated as 27.16 paisa per unit. However, the backlog leftover from previous adjustment was 17.93 and 8.53 paisa for fuel price variation and power purchase, respectively.
According to the prescribed mechanism, the maximum adjustment that can be allowed in a quarter due to variation in fuel price is 2.5 percent of the average sale rate and due to variation in power purchase price is 1.5 percent of average sale rate. Therefore, the allowed adjustment in sale rate on account of variation in fuel cots has been assessed at 13.53 paisa per unit and on account of variation in power purchase at 8.12 paisa per unit (which includes 3.64 paisa per unit of the balance carried forward for the last quarter) and 4.48 paisa per unit for the current quarter (July-September).
The determination further says that the overall allowable adjustment on both accounts of fuel variation and power purchase price, therefore, worked out at 21.65 paisa per unit. The spillover left to be adjusted in the next quarter is 27.08 paisa per unit and 4.89 paisa per unit for fuel cost and power purchase, respectively.
Nepra said that to compensate KESC for variations in cost of fuel and power purchase from Wapda and independent power producers (IPPs), the regulator has allowed a uniform increase in consumer end tariff for all consumer categories by 22 paisa per unit, except for the lifeline consumers consuming up to 50 units per month.