PD gets PM’s nod for power tariff hike

ISLAMABAD: The Power Division has reportedly obtained Prime Minister’s approval to further enhance electricity tariff, ie, up to 10 percent of the total cost and reduction of variable charges to ensure tariff remains neutral for end consumers, besides recovery of taxes from relevant segments instead of through electricity bills and winding up the poorly performing NTDC, well-informed sources in CPPA-G told Business Recorder.

These tasks will be accomplished by the Power Division and National Electric Power Regulatory Authority (NEPRA) by June 30, 2024.

“The Power Division to get approval of tariff restructuring from the relevant forum for proposed tariff restructuring by enhancing fixed charges up to 10 percent of total cost and reduction of variable charges. It was directed that the proposal shall remain tariff neutral for end-consumers,” the sources added.

Nepra advises govt to review power tariff structure

The NEPRA is giving final touches to schedule of public hearings on Discos new tariff petitions for 2024-25, in which Discos have sought approval of revenue of Rs 2.765 trillion on different accounts. Meanwhile, CPPA-G has also sought approval of Power Purchase Price (PPP) of over Rs 27 per unit for FY 2024-25 and Market Operator Fee (MoF) of Rs 3.48 per unit.

It has also been decided that Federal Board of Revenue (FBR) in consultation with Ministry of Finance will review the overall taxes applicable on electricity consumers and submit a plan for direct recovery of the said taxes from the relevant segments instead of recovering the same through electricity bills.

Prime Minister has also directed Power Division to initiate summary to solicit approval for immediate implementation of policy on revenue-based load shedding by May 30, 2024. Amendment to NEPRA Act is to be initiated by Power Division soliciting requisite approvals from Cabinet and submission to Parliament.

The sources said Committee is to be headed by Ministry of Finance to rationalize cross subsidy plan of industrial consumers and submit recommendations. APTMA claims that export-oriented industry is providing cross subsidy of Rs about Rs 250 billion per annum to other domestic consumers.

Committee headed by Poverty Alleviation & Social Safety Division has been tasked to finalize the action plan for direct subsidy disbursement and to seek approval of Federal Cabinet.

On NTDC, Power Division has been directed to notify a Committee comprising of Minister for Economic Affairs, Ahad Khan Cheema, Minister for Power, Sardar Awais Ahmed Khan Leghari and Dr. Faiz Ahmad Chaudhry (former MD NTDC) to finalize the way forward for winding up of NTDC and submit recommendations for consideration of the Prime Minister.

Power Division is to initiate a summary for bifurcation of NTDC into PTIDC and NTMC after due diligence. The CPPA-G and NPCC (National Power Control System) will be restructured for creation of an Independent System & market Operator (ISMO).

A meeting with the Prime Minister will be arranged to discuss the potential cooperation with China State Grid to overcome Pakistan’s transmission challenges.

Ministry of Planning, Development and Special Initiatives and Power Division will seek approval in principle for inclusion of recommended projects (transmission lines, reactive power compensation) under PSDP for FY 2024-25. Ministry of Planning will ensure addition of BESS project in PSDP for FY 2025-26.

Power Division has been directed to revaluate current evacuation limit and develop a plan for maximum evacuation of power from south to north and get approval from relevant forum.

Copyright Business Recorder, 2024