Govt seeks tariff cut, margin uncapping for EVCS

ISLAMABAD: The federal government has requested the National Electric Power Regulatory Authority (Nepra) to reduce the base tariff for Electric Vehicle Charging Stations (EVCS) by Rs23.57 per unit.

Additionally, the government has proposed removing the capped margin of Rs24.44 per unit for EVCS, allowing investors to set their own margins based on market forces. The motion, filed under the Regulation of Generation, Transmission, and Distribution of Electric Power Act of 1997, aims to encourage the development of EV charging infrastructure. The government highlighted that EVs offer a cleaner, more efficient transportation mode, reducing reliance on imported fuels and mitigating environmental degradation. However, the sector’s growth has been hindered by economic challenges and high energy prices.

Currently, EVCS falls under the commercial category with a base rate of Rs45.5 per unit, which includes a Rs10 cross-subsidy. After taxes and adjustments, the effective tariff reaches approximately Rs71 per unit. Nepra also set a margin of Rs24.44 per unit, making the maximum tariff around Rs95 per unit. While this offers savings for EV users compared to conventional fuels, it provides a low return on investment for operators, limiting infrastructure expansion. The government’s proposal seeks to rationalize the base tariff to facilitate growth and meet Pakistan’s 2030 EV policy target. The difference in tariffs will be managed through a cross-subsidy mechanism, with existing taxes and adjustments remaining in place. A public hearing on the motion is scheduled for February 12, 2025.