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Monday June 17, 2024

Nepra considers additional collection amid decline in electricity demand

With the approval, consumers will bear an additional burden of Rs1.45 per unit

By Israr Khan
May 18, 2024
The National Electric Power Regulatory Authority (Nepra) sign can be seen on a building. — APP/File
The National Electric Power Regulatory Authority (Nepra) sign can be seen on a building. — APP/File

ISLAMABAD: Amidst a notable decline in electricity demand spanning various sectors, the National Electric Power Regulatory Authority (NEPRA) has hinted at authorizing an additional collection of Rs51.86 billion from power consumers under the third quarterly adjustment of FY24.

With the approval, consumers will bear an additional burden of Rs1.45 per unit. This quarterly adjustment is proposed to be implemented in July, August, and September, according to NEPRA officials. The final approval will be given after a thorough review. This rate hike will also be implemented on K-Electric consumers.

On Friday, the National Electric Power Regulatory Authority conducted a public hearing regarding the petition submitted by the Central Power Purchasing Agency (CPPA) on behalf of all distribution companies.

According to NEPRA officials, net metering has reached 160 megawatts within IESCO, with the country’s overall net metering climbing to 2,000 megawatts. Concerns were raised during the hearing regarding the potential decline in net metering rates and the implications of heightened net metering on grid electricity purchases. “We will address this matter when it comes to us,” commented the NEPRA Chairman Waseem Mukhtar.

The hearing also scrutinized the performance of HESCO, which NEPRA member Rafique Ahmed Shaikh criticized as the poorest among the companies. Notably, no representative from HESCO attended the hearing, prompting NEPRA to issue a show-cause notice. “The situation in HESCO is shameful,” stated Shaikh.

NEPRA Chairman warned that HESCO is forcing the authority to take extreme measures. “I will personally write the note against HESCO in the decision,” he stated, adding that the Power Division would also act against HESCO.

The Power Division emphasized the urgency of implementing the quarterly adjustment and noted that the fourth quarter adjustment would be submitted before July 15. By May 9, Rs 104 billion had been recovered from electricity defaulters, with the government still needing to recover Rs 1.3 trillion, according to Power Division officials.

During the quarter (Jan-March 2024), industrial consumption in IESCO decreased by three percent, and demand in the cement industry within IESCO jurisdiction dropped by 18.2 percent, stated the IESCO CEO.

In LESCO, electricity demand fell by 7.2 percent, with industrial demand down 15 percent and domestic demand down three percent, according to the LESCO CFO. Overall electricity demand in PESCO decreased by 9.1 percent, with industrial demand falling 17.7 percent and agricultural sector demand dropping 15.5 percent, the PESCO CEO reported.

SEPCO’s domestic sector demand decreased by 14.7 percent, said the SEPCO CEO, while commercial sector demand and tube well electricity demand decreased by 20 percent and 16.6 percent, respectively. SEPCO also reported that out of 800,000 consumers, 300,000 are running defaulters.

The Korangi Association expressed concerns over the high cost of electricity, with representative Muhammad Rehan warning that “in these conditions, the industry will shut down.”