Motion filed with Nepra: All set for Rs3.23/unit additional surcharge on electricity

ISLAMABAD: The Federal Government has filed a Motion with National Electric Power Regulatory Authority (Nepra) for imposition of additional surcharge of Rs 3.23 per unit on all categories of consumers’ sans domestic consumers (protected category) across the country for indefinite period as per understanding with IMF, which wants continuation of additional recovery from consumers to minimize flow of circular debt.

The regulator is scheduled to hold a public hearing on March 16, 2023 to put its stamp on government’s plan to further burden consumers, already facing historic inflation.

Delay in imposition of additional surcharge was cited as one of the few key reasons which were in the way of finalization of agreement with the IMF.

According to Power Division, Economic Coordination Committee (ECC) of the Cabinet, in its meeting held on February 10, 2023 approved imposition of additional surcharge of Rs.3.39/unit (total surcharge became Rs. 3.82/unit) for four months’- from Mar-23 to Jun-23.

Further the ECC also approved additional Rs. 1/ unit for FY 2023-24 (total surcharge for FY 24becomes Rs1.43/unit) for consumer categories to cover the mark up charges of Power Holding Limited (PHL) loans not covered through already appreciable FC surcharge @ 0.43/unit. The decision was duly ratified by the Cabinet on February 24, 2023.

Motion filed with Nepra: Govt seeks additional surcharge of Rs3.39/unit for 4 months

Power Division maintained that surcharge of Rs.1.43/unit would yield Rs. 126 billion for 2023-24, which was not sufficient to meet the power producers’ liabilities.

These liabilities were essentially an obligation of the Federal Government with respect to payment of electricity services having nexus with the sovereign guarantees, adding that non-payment to power producers may result in loss of generation capacity which can lead to increased load shedding.

Further, since the payments to the power producers had been secured by sovereign guarantee, issued by the Government of Pakistan, the power producers would start calling upon the sovereign guarantees along with the imposition of late payment surcharge.

Section 31(8) of the Regulation of Generation, Transmission and Distribution of Electric Power Act 11997 empowers the Federal Government to collect surcharges from the consumers for fulfilment of any financial obligation of the Federal Government with respect to electric power services, within the bracket of ten percent of the aggregate revenue requirement of all electric power suppliers.

Accordingly, it was proposed that the amount of surcharge may be enhanced so as to yield Rs. 335 billion (against already approved number of Rs.126 billion for FY 2023-24) and onwards for different consumer categories.

Copyright Business Recorder, 2023