ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) is all set to hold a public hearing to put a stamp on modified Schedule of Tariff (SoT) for consumers of Discos proposed by the Power Division on July 8, 2024, to increase domestic consumers tariff by Rs 7.12 per unit sans lifeline consumers, as government has alerted NEPRA’s original determination on base tariff revision after talks with the IMF.
Last month, NEPRA determined base tariffs of Discos and sent determinations to Power Division for approval from the federal government, ie, Federal Cabinet for issuance of revised SoT of Discos. However, Power Division has made changes in the determined base tariff and shifted more financial burden on middle category of domestic consumers (ranging from 200-400 units) as cross subsidy has been reduced to minimum level on the demand of textile sector. The government intends to raise over Rs 550 billion from power sector during 2024-25. In addition, the government will also recover huge amount from power consumers through different levies which constitute about 40 per cent of total bill.
On July 2, 2024, Prime Minister Shehbaz Sharif accorded approval of revised SoT in the light of talks with IMF whereas on July 3, 2024, Federal Cabinet approved the summary through circulation.
According to the proposed SoT, to be effective from July 1, 2024, there will be no change in uniform tariff for domestic lifeline (non-ToU) consumers using up to 100 units monthly. However, an increase of Rs 3.95 per unit will be made for domestic consumers who will now pay Rs 11.69 per unit instead of Rs 7.74 per unit whereas those who will consume 101-200 units per month will pay additional Rs 4.10 per unit to Rs 14.16 per unit from 10.06 per unit.
Another category of domestic consumers who do not fall in life line category and use 1-100 units will pay additional Rs 7.12 per unit to 23.59 per unit from 16.48 per unit, 101-200, 30.07 per unit from Rs 22.95 per unit, 201-300, Rs 34.26 per unit from Rs 27.14 per unit, 301-400 units, Rs 39.15 per unit from 32.03 per unit, 401-500 units, Rs 41.36 per unit from Rs 35.24 per unit( with addition of Rs 6.12 per unit), 501-600, Rs 42.76 per unit from 36.66 per unit, 601-700 units, Rs 43..92 per unit from 37.80 per unit and above Rs 48.84 per unit from Rs 42.72 per unit ( with increase of Rs 6.12 per unit).
Likewise, revised SoT for the industry, commercial sector, agriculture sector and street lights will also be given final approval.
Power Division has informed the Prime Minister that currently, the national average uniform applicable base rate on revised sale mix is Rs 28.44/unit which would be increased to Rs 32.99 per unit after a net average increase of Rs 4.55 per unit including rebasing and tariff rationalization.
“If the rebasing is applied with effect from July 1, 2024, the amount of tariff differential subsidy is expected to be around Rs 266 billion. No increase has been proposed for the domestic non-ToU lifeline consumers whereas the rate for industrial consumers has been maintained at the last year level in an effort to reduce the cross-subsidy burden. Similarly, the tariff for AJ&K has also been reduced to arrive at the cost of service,” the sources quoted Power Division as claiming in its summary to the Prime Minister.
In its determinations, the NEPRA has increased the fixed charges from Rs. 200-500/kW/month to Rs. 500-2,000/kW/Month in order to align the sector’s cost and recovery structures. However, after considering frequent representations made by the consumers regarding heavy increase (up to 400%) in fixed charges, Power Division has recommended that the fixed charges may be increased to Rs. 400-1,250/kW/M only in the instant determination and the variable rates may be adjusted accordingly. Further, the consumers having low utilization in certain months are impacted significantly by applying fixed charges @ 50% of sanctioned load. It is also recommended to revise the application of fixed charges @ 25% of sanctioned load.
Earlier, Power Division moved a summary for the Cabinet on June 14, 2024 for approval through circulation. However, during discussion with IMF on MEFP, IMF raised certain issues related to cross subsidies. Accordingly, after detailed discussions between Power Division, Finance Division and other stakeholders, tariff schedules have been modified.
Copyright Business Recorder, 2024
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