KE allowed Rs0.57 per unit tariff hike for three months

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday allowed the K-Electric to collect additional Rs0.5715 per unit on account of quarterly tariff adjustments for three months from June to August 2022 that will be charged in the next three months starting from August to October 2022, raising the average tariff to Rs26.08 per unit.

This upward adjustment would be recovered from the consumers in their utility bills of August, September and October 2022 based on the electricity units consumed during the months of June, July and August 2022. However, still, the power consumers in Karachi will get a subsidy of Rs3.98/unit from the federal government as per the decision taken by the Nepra. After the increase, the average tariff for the Karachi consumers would be increased from the existing Rs25.52/unit to Rs26.08/unit.

The power regulator, on August 1, 2022, held a public hearing on the federal government’s motion with respect to the consumer-end tariff recommendations of the K-Electric.

The authority has determined the periodic adjustment in tariff for the first quarter of FY 2021-22 for XWDlSCOs having a uniform rate of Rs0.5715/unit for three months period and the same had been notified on May 31, 2022. In accordance with the National Electricity Policy, 2021, the government may maintain a uniform consumer-end tariff for the K-Electric and state-owned distribution companies -- even after privatisation -- through the incorporation of direct or indirect subsidies.

Accordingly, the K-Electric’s applicable uniform/variable charge is also required to be modified so as to fulfill the revenue needs of the KE, determined by the authority consistent with the uniform national tariff of XWDlSCOs. The same has been approved by the federal government and it was decided that the same would be submitted to the authority for consideration in terms of the provisions of the Act.

The instant motion was filed by the federal government with respect to the consumer-end tariff recommendations of the KE, under Section 7, 31(4) and 31(7) of the Act read with Rule 17 of the Rules so as to reconsider and issue for the KE the modified uniform/variable charge to maintain uniform tariff across the country and to fulfill the revenue requirements of the KE determined by the authority keeping in view the proposed targeted subsidy and cross-subsidies. The Nepra has reserved the judgment after the scrutiny of the data.

When inquired during the hearing, the Power Division submitted that as per the motion, the increase of Rs0.5715/unit has been proposed on the consumption during the months of June, July, and August 2022 and that would be recovered from the consumers during the months from July to September 2022, respectively, however, since the month of July 2022 has lapsed, therefore, the same may be recovered from the consumers during the months from August to October 2022, based on the consumption during June, July and August 2022 respectively.

During the hearing, the federal government submitted that as per the National Electricity Policy 2021 (Section 5.6.3), in view of various parameters, including (a) the socio-economic objectives; (b) budgetary targets in the field; and (c) recommendations of the Regulator with respect to the consumer-end tariff for each state-owned distribution company, the government may continue to propose uniform tariff for consumers across the regions. In pursuance thereof, the Regulator shall, in public consumer’s interest, determine a uniform tariff -- inclusive of quarterly adjustments -- for all the state-owned distribution companies.

It was also explained that despite the proposed increase of Rs.0.5715/unit, the government would still be continuing a subsidy of around Rs3.98/unit on the Nepra-determined tariff, which would increase in the future after the Authority determines the quarterly tariff adjustment of the K-Electric for June 2022.