Do you know Govt to Get Rs. 55 Billion in Electricity Bills Delayed by Floods? Under the updated circular debt management strategy agreed by the Economic Coordination Committee, the federal government has resolved to collect Rs. 55 billion from consumers whose power payments were postponed owing to floods last year (ECC).
Additionally, the Ministry of Energy’s Power Division forecasts that a rise in electricity rates will bring in Rs. 73 billion between February and November 2023.
Govt to Get Rs. 55 Billion in Electricity Bills Delayed by Floods
According to projections from the Ministry of Energy, the quarterly tariff adjustment (QTA) will cost Rs. 3.21 per unit from February to March 2023 and Rs. 0.69 per unit from March to May 2023.
The ministry anticipates receiving 57 billion rupees (Rs. 40 billion in the next two months and Rs. 17 billion in April and May). The ministry has also projected an increase of 1.98 rupees per unit QTA from September to November 2023 and 1.64 rupees per unit QTA from June to August 2023.
According to sources, the ministry has informed the ECC that a revised base case circular debt is Rs. 952 billion based on estimates for the fiscal year 2023 and that a new iteration for forecasting power purchases price, which is approximately 90% of the total power sector revenue requirement, has been carried out (FY23).
However, it predicted that changes in the exchange rate could cause power purchase invoices to fluctuate by about Rs. 5 billion.
By timing price increases, the electricity ministry will reduce DISCO losses to 16.27 percent by the end of FY23, in accordance with the amended plan. The ministry has also informed ECC that it will renegotiate power purchase agreements with Uch Power Limited and six wind power facilities.
Additionally, starting on March 1, 2023, the government would stop offering the Kissan and Zero Rated Industrial packages, saving an additional Rs 65 billion.
The package includes markup savings from IPP stock payments of Rs. 11 billion, FCA recoveries through June 2023 of Rs. 31 billion, PHL markup surcharge recoveries of Rs. 68 billion, GST and Taxes on collection basis of Rs. 14 billion, reimbursement from FBR of Rs. 5 billion, and additional government subsidies of Rs. 335 billion.
The updated circular debt prediction after stock payments would be Rs. 122 billion, while the expected circular debt flow for the year would be Rs. 336 billion.
The total circular debt would be Rs. 2,374 billion in FY23, of which Rs. 765 billion would be stored in PHL, Rs. 1,509 billion would be paid to power companies, and Rs. 100 billion would be paid by GENCO to fuel suppliers.
According to the updated plan, the Ministry of Energy (Power Division) has decided to keep the recovery ratio at 90% despite the fact that recoveries have gotten worse as a result of significant flooding and price hikes.