Govt mulls uniform electricity tariff structure

KARACHI: Government is mulling a new uniform tariff structure for power distribution companies, which is likely to raise the national electricity average rate to Rs15.53/kilowatt-hour from the exiting Rs12.92/kWh, The News learnt on Wednesday.

The government proposed the uniform tariffs based on determined revenue requirement of ex-Water and Power Development Authority (Wapda) distribution companies to the National Electric Power Regulatory Authority (Nepra), which would raise the national average rate.

“Presently the consolidated prudent revenue requirement of Rs1.611 trillion recommended by the Nepra is to be recovered by way of differential tariff for each category of consumer of each ex-Wapda distribution company,” the government said in a statement.

Presently, the schedule of tariffs-based on tariff rationalisation (subsidy/surcharge) applies the same rate for each category of consumer, while maintaining national average of Rs12.92/ kWh, inclusive of subsidy of Rs1.19/kWh. The national average is to be maintained at Rs15.53/kWh to recover the additional determined revenue requirement of Rs396 billion.

Nepra has already determined revenue requirement of each ex-Wapda distribution company based on individual accounts. Government proposed that the revenue requirements of each distribution company determined by Nepra should be consolidated, “which thereafter (should) be utilised for the purpose of arriving at uniform tariff across each category of consumer i.e. national average, subject to its adjustment on account of targeted subsidy”.

The government also proposed amendment into the tariff rules to provide the mechanism, procedure and standard for the purpose of determination of uniform tariff.

Nepra may, on a monthly basis and not later than a period of seven days, make adjustments in the approved tariffs on account of any variations in the fuel charges and policy guidelines as the federal government may issue and notify the tariff.

Government, therefore, proposed that for such category of customer of each distribution company where the recommended rate of Nepra is more than uniform tariff determined, such distribution company would be entitled to claim the differential as subsidy, which would be released subject to adjustment on account of inter-distribution companies tariff rationalisation.

“Similarly, for such category of customer of each distribution company, where recommended rate is less than uniform tariff, such distribution company would be obligated to deposit such additional charge as inter-distribution company tariff rationalisation adjustment directly with CPPA-G (Central Power Purchasing Agency-Guarantee) for the purposes of adjustment of liabilities of approved and notified generation and transmission costs.”

The government proposed that hearing should be provided for the purpose of providing detailed submissions, including session with the technical professional team of Nepra prior to hearing. “Further, additional grounds may also be presented subsequently.”