Industrialists urge higher usage cap in winter power package

ISLAMABAD: Industrialists and businessmen across Pakistan urged the government Tuesday to revise the winter electricity package to include net metering and increase 25pc cap on incremental use of electricity.

They warned that without these revisions, the package will fail to deliver the promised relief amid skyrocketing energy costs.

During a public hearing on the petition of the federal government for winter package, chaired by Nepra Chairman Waseem Mukhtar, Karachi-based industrialists voiced their frustration, particularly over exclusion of industries equipped with net metering systems.

They emphasized many industries had invested heavily in installing net metering systems to reduce their production costs. But these investments are now rendered ineffective due to their exclusion from the package.

“Industries with net metering systems are receiving 15 to 20pc of their power from solar sources, while over 80pc comes from national grid. Excluding them from the package negates their efforts and penalises them despite their capacity charges,” said one industrialist.

They also criticised the package’s limited cost-saving potential, highlighting Karachi’s current electricity tariff of Rs64 per unit as unsustainable. The government’s claim of savings of up to Rs14 per unit was dismissed as misleading, with representatives estimating actual savings at only Rs4 per unit over the next three months.

In Karachi’s Korangi area, where a majority of 4,500 factories have solarised their operations, industrialists warned the 25pc cap on incremental electricity use would further limit benefits.

“This system will fail unless industries with net metering are included,” they argued, citing an average benefit of less than Rs4 per unit under the current package design.

“Excluding net metering industries and maintaining a low cap will only hinder the package’s success, leaving industries and consumers struggling with soaring energy costs,” warned one participant.

The hearing also revealed widespread confusion over the package’s implementation timeline.

Initially announced to cover December 2024 to February 2025, it was later clarified the package applies to November, December, and January consumption, leaving many consumers unaware the package was already in effect.

This delay, coupled with unclear communication, has led to a wasted month, participants said. “Consumers received December bills based on November consumption, but they weren’t informed the package was active,” one industrialist noted.

A representative from Cherat Cement called for not only including net-metering industries but also raising 25pc cap on incremental electricity use. “Maintaining low cap will continue to stifle industries’ growth, while failing to alleviate their energy cost burden,” he said.

K-Electric (KE), a major player in Karachi’s energy sector, faced criticism for its role in past package implementation issues. Participants urged the government to prevent KE from obtaining court stay orders that could delay benefits, citing company’s Rs32 billion debt to consumers from previous packages.

KE officials assured the current package would be implemented according to government’s schedule, but they deferred decisions on increasing the cap to policymakers.

The National Electric Power Regulatory Authority (Nepra) faced allegations of muting or disconnecting microphones during critical discussions, a practice reportedly repeated from previous hearings. Chairman Waseem Mukhtar blocked questions on technical and legal issues, frustrating the stakeholders.

The government official, who presented the case before Nepra, acknowledged an average benefit of Rs3-4 per unit for consumers. Nepra said a detailed decision after reviewing stakeholder feedback will be issued. However, industrialists remain skeptical of the package’s potential impact without significant revisions.