Excess from 200 units limit: KE proposes CSM amendments for protected consumers

ISLAMABAD: The K-Electric has proposed amendments to the Consumer Service Manual (CSM) to safeguard the protected domestic consumers from occasional excess from the 200 units per month limit and avoid misuse of temporary disconnection clause due to recent rebasing of tariff, well-informed sources told Business Recorder.

The power utility company has submitted these recommendations after a thorough review of a decision of NEPRA with respect to rebasing of consumer-end tariff, effective from July 1, 2024 and CSM issued by the Regulator on January 31, 2021.

Currently, the Government is facing a challenging situation and delivering a rebased consumer tariff which prioritizes industrial consumers to boost industrial growth across the country while protecting the most vulnerable segments of society.

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KE is expecting that the introduction of fixed charges closely aligns it with the tariff structure applicable in regional countries, hoping this will help in achieving financial stability of the sector.

In this regard, KE has submitted few recommendations to the Power Division with respect to different categories of consumers which are as follows:

i) Protected consumers’ status: The current tariff regime applies lower rates to protected consumers, defined as those who consistently use less than 200 units per month for six consecutive months, typically belonging to the low-income segment.

However, if these consumer exceed 200 units in any given month, their protected status is temporarily revoked, and they are charged higher, unprotected consumer rates for the following six months.

For instance, if a protected consumer loses his protected status and consumes 201 units in a month, followed by 200 units each month for the next six months until its protected status is reinstated, the consumer incurs an additional cost of approximately Rs 20,000 due to the higher tariff rates, thereby significantly burdening the end consumer.

Considering this matter and to alleviate the burden on these consumers, if they exceed 200 units in one month (but remain below 200 units in the next month), KE has suggested that their protected status should be reinstated from the next month onwards, rather than subjecting them to higher tariffs for the next six consecutive months, thus allowing them a one month exception in six months period.

This adjustment is aimed at sustaining the affordability and accessibility of electricity tariffs by ensuring that residential consumers are not duly burdened by penalties for occasional excess consumption, thereby allowing them continued access to essential electricity services at reasonable rates, promoting economic stability and social welfare.

Moreover, considering that recovery is also a critical element with respect to the overall sector sustainability, therefore, additional incentives should be introduced for consumers with continued good paying behaviour.

ii) Timely issuance of tariff decisions: Sharing views on issuance of tariff decisions, KE has suggested initiating its billing process by fifth of each calendar month. In this regard, the power utility company has requested Power Division to issue all decisions relating to consumer tariff including Fuel Charge Adjustment (FCA), applicable for the same month, before the start of the billing process, taking into account the time required for notification of SRO, as any impact of changes to the consumer tariff in pursuance of Authority’s decisions after the start of billing, is passed on to the consumers in the next billing cycle as arrears, potentially overburdening them and leading to late recovery.

iii) Opportunity of misuse of the temporary disconnection clause of CSM: Commenting on opportunity of misuse of the temporary disconnection clause of Consumer Service Manual (CSM), the power utility company has explained that as per clause 8.3.2 of the existing CSM, consumers may opt for temporary disconnection of supply for a maximum period of eleven months and are exempted from payment of actual notified minimum/fixed charges during the period of temporary disconnection.

Moreover, as per the reconnection policy under clause 8.5.2 of the CSM, consumers are exempt from payment of minimum/fixed charges for the first ninety days and thereafter are required to pay minimum charges/fixed charges for one month out of a quarter only.

The KE argues that by virtue of the above clauses, consumers have an opportunity to avoid paying monthly minimum/fixed charges determined by the Authority/GoP resulting in under recovery of fixed charges which will ultimately burden other consumers.

KE has proposed an amendment to the clause that there should be no exemption from fixed/minimum charges to ensure that consumers do not use the provision to avoid minimum/fixed charges.

The KE has sought comprehensive overhaul of the tariff structure, which has already been initiated by the Power Division, to unlock the country’s full potential and provide sustainable economic and social upliftment and growth for years to come and to create a more balanced and beneficial environment for consumers in the long run, ensuring fair distribution of costs and enhancing efficiency and growth in the energy sector.

KE maintains that the proposed recommendations would aid in the achievement of these objectives, requesting Power Division to issue necessary guidelines to the Nepra.

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