The National Electric Power Regularity Authority (Nepra) on Tuesday reduced power tariff of two companies, Lahore Electric Supply Company (Lesco) and Multan Electric Power Company (Mepco).
The average reduction for residential consumers using above 300 units is Rs 0.45/kWh for Lesco and Rs 0.41/kWh for Mepco; commercial Rs1.92 /kWh for Lesco and Rs1.57/kWh for Mepco; industrial Rs 1.08/kWh for Lesco and Re 0.68/kWh for Mepco; and agricultural sector Rs 0.84/kWh for Lesco and Rs 0.55/kWh for Mepco.
A press release issued by Nepra said that tariffs will be applicable from the date of notification in the official Gazette.
This decision would help both agriculture and manufacturing sectors to compete in international market under WTO regime.
While determining the tariff, the Authority had considered the prudent costs of the companies required to provide reliable service at the most economic rates, added the press release.
Incentives have been provided to reduce cost, particularly losses, in the distribution system by allowing a performance based tariff. The Authority found that since there was a large percentage of industrial and commercial consumers in the territory of the two companies the present rates will result in revenue accrual, which is more than the prudent costs.
Therefore the average sale rate of the two companies had to be lowered to equate the revenue accrual to the prudent costs of the company and allow a reasonable return on their assets.
The Authority in its determination while reducing the rate of various consumer classes kept in view the minimisation of the cross-subsidies prevalent in the consumer-end tariff. Consequently, except residential domestic consumers whose consumption is less than three hundred units per month and who are already provided electric power at subsidised rates, the tariffs of various consumer classes have been reduced to reflect its cost of services.
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