ISLAMABAD – WAPDA has projected an increase of 20 percent in revenue requirement for the FY2022-23, as it has sought NEPRA approval for the hike in tariff for bulk supply of power from its hydel power stations.
In its tariff petition, for revision of tariff for 2022-23 for sale of bulk supply of power from WAPDA hydel power stations, WAPDA has requested NEPRA for determination of revenue requirements of Rs 121.808b for ongoing fiscal, which is 20pc higher than the NEPRA’s determined revenue requirements of Rs 101.382b for the FY 2021-22.
Changes in components of revenue requirements of WAPDA hydroelectric for FY2022- 23, as against the NEPRA-determined revenue requirement for FY2020-21 have formed the basis for this tariff modification petition which has been projected with the help of audited financial statements of WAPDA hydroelectric for FY 2019-20 and FY 2020-21, six months (Jul-Dec) actual numbers for FY 2021-22, provisional numbers for last six months (Jan-Jun) of FY 2021-22 and budget numbers for full FY 2022-23.
WAPDA hydroelectric main source of revenue stems from the sale of power to CPPA(G).
Revenue requirements of WAPDA Power Wing Hydroelectric comprise O&M expenses, depreciation charges, Ijara rentals, return on regulatory asset base (RAB), and regulatory revenue gap.
Similarly for the hydel levies to be paid to KP, Punjab, and AJK, NHP/WUC WAPDA has requested Rs 34.387b during the FY 2022-23.
For payment to the Indus River System Authority (IRSA), WAPDA has demanded another Rs 157 million during the ongoing fiscal year.
Conclusion From the Above Comparison
- Projected increase in regulatory assets base (RAB) for power stations and development projects due to capital expenditures on rehabilitation replacement of aged generation plants and acquisition of new fixed assets as well as due to more capital investment in the under-development hydropower projects.
- Projected increase in O&M cost for FY 2022-23 against O&M determined by NEPRA for FY 2020-21.
- Variation in Depreciation charges for FY 2022-23 from that determined by NEPRA for FY 2020-21.
- Variation in Debt-Equity Ratio and WACC from that allowed by NEPRA for FY 2020- 21.
- Change in estimated other Income from NEPRA regulated business activities for FY 2022-23 with NEPRA determined for FY 2020-21.
- Regulatory Revenue Gap for FY 2019-20, FY 2020-21, and FY 2021-22 has arisen due to differences between actual and allowed revenue requirements as well as delayed determination and notification of tariff. For revenue requirement, NEPRA has been informed that the O&M expenses have been increased from the NEPRA-determined Rs 17.622b for the FY 2021-22 to Rs 23.616b during the ongoing fiscal.
- It has been projected that depreciation (repayment of loan & equity) will increase from Rs 6.869b in FY 2021-22 to Rs 8.025b, return on investment-HIP stations from Rs28.330b to Rs 30.385b, return on investment-HIP projects from Rs 21.030b to Rs 34.265bn, regulatory revenue gap from Rs 15.515b to Rs 26.285b during the current fiscal.