Wednesday, August 4, 2010

NEPRA's quarterly determinations of DISCOs;wasteful and nauseating

As per new rules ,Energy Charges of DISCOs are determined monthly and Distribution Margins quarterly.There is a justification and need for more frequent (monthly) determination of energy charge due to the volatility of fuel prices these days.However,one is not sure of Quarterly determinations of DISCO's margin,which is usually less than a rupee per kWh,i.e. less than 0% of the average selling price, excluding T&D losses which are a long term issue.Every quarter same data is provided and long advertisements costing millions of rupees have to be published.Nothing changes,no new wisdom or edicts are generated.Public has mostly lost interest and enthusiasm in such proceedings.It is high time that the quarterly determination process is reconsidered and replaced by an annual determination.

However and ironically, until very recently,energy charge which forms 90% of the tariff,used to be simply conveyed in a two liner without any detail, determination or explanation.Only recently I noticed some details being published.The argument behind a summary handling is that most of the constituting tariff of IPPs and GENCOs have been earlier determined through a public process.This is only partly correct.NEPRA determines only a reference tariff, and actual payments are quite different.There are a number of variables and factors for which payments are made by PEPCO/CPPA, which requires some kind of public scrutiny.As such the issue of fuel charge requires , at-least,annual discussion and regulation.Monthly publication of energy charge details is a welcome practice initiated by NEPRA.It needs to be followed up and its scope expanded.

To be fair,it must be explained here that NEPRA has had no part in deciding that quarterly determinations of DISCOs would be made.It came from the legislation prepared by the wise men and most probably consultants of the sorts of the Ministry of Water and Power. NEPRA's wise men would probably be happy with me for once on my opposition to quarterly determinations

1 comment:

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