Recovery of Rs24.5bn from KE consumers: Govt seeks to impose Rs1.52/unit surcharge

ISLAMABAD: The federal government seeks to impose Rs1.52 per unit surcharge on K-Electric (KE) to recover Rs24.5 billion.

As soon as the public hearing regarding the motion of the federal government with respect to the recommendation of consumer end tariff for K-Electric started at National Electric Power Regulatory Authority (Nepra), some members expressed reservations about the performance of the Power Division.

Some members questioned how the National Electricity Policy 2021 can be enforced in the back years of 2019-20 to impose Rs1.52 per unit surcharge on the KE tariff to recover Rs24.5 billion.

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Additionally, they added that the Power Division must ask the Finance Ministry whether this amount of Rs24.5 billion has been accounted for in the budget or not and if it is accounted for in the fiscal year 2019-20 budget then there is no justification to impose this surcharge.

A member added that his understanding was that this amount has already been accounted for by the Ministry of Finance in the budget.

The Ministry of Energy (Power Division) added that the law allows the federal government to put a surcharge if it is within the limit of 10 percent.

The hearing was informed that the policy has been approved to implement a uniform tariff immediately to the KE and this one-off surcharge is being imposed to recover some portion of 2019 quarterly adjustment. The meeting was informed that the uniformity of tariff would be implemented immediately besides there is no old tariff left to recover, after the imposition of the proposed surcharge.

The Ministry of Energy (Power Division) stated that only Rs24.5 billion is being recovered of 2019 by imposing a surcharge, whereas, as far as subsidy is concerned it is being provided continuously. In the last five years, the Nepra was told that Rs416billion subsidy was provided to the consumers of KE and even now Rs10 per unit subsidy is being given to the KE industrial consumers.

The federal government (Power Division) further stated that for the ongoing fiscal year, the government has earmarked Rs976billion subsidy for the power sector, of which, Rs298 billion are for KE.

The decision of the hearing was reserved by the authority to be announced in the next few days. The public hearing was presided over by Waseem Mukhtar, chairman Nepra. Nepra members, Engr Rafiq Ahmed Sheikh, Engr Maqsood Anwar Khan, Mutahar Niaz Rana and Amna Ahmed were also present.

Copyright Business Recorder, 2023