ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved reduction of electricity tariff by Rs1.71 per unit for Discos and KE on the motion of Power Division, to be provided from projected collection of Rs58.6 billion from additional PL of Rs10/litre on MS and HSD for one quarter.
The Power Division, in its letter of March 27, 2025, filed a motion regarding recommendation of consumer end tariff for Discos and K-Electric, under sections 7 and 31 of the Regulation, Generation, Transmission and Distribution of Electric Power Act, 1997.
The Petroleum Division, in its motion stated that the national average rate for FY 2024-25 determined by NEPRA is Rs35.50/kWh, against which the government notified national average tariff is Rs32.99/kWh (October 2024 and onwards), bridging the gap through Tariff Differential Subsidy (TDS).
Discos and KE consumers: Nepra approves Rs1.9 negative adjustment for Q2FY25
Further, the government has also maintained a uniform consumer-end tariff for K-Electric through incorporation of TDS for K-Electric consumers.
The MoE further submitted that in line with the government’s efforts to reduce consumer-end tariffs and improve demand, the federal government has decided to increase the tariff differential subsidy for electricity consumers for April to June FY 2025. The per-unit additional TDS for all consumers of XWDISCOs and K-Electric (except lifeline domestic), is estimated at Rs1.71/kWh for April — June 2025.
The matter was considered and approved by the Cabinet on March 26, 2025 and it was decided that the same be submitted to the authority for consideration and approval in terms of Section 31 of the Act. Once considered and approved by NEPRA, it will lead to notification by the federal government by modification, to the extent of the subsidy relief specified above, of existing rates notified via SRO 1039 (1)12024 of July 14, 2024, read in conformity with earlier issued applicable notifications.
According to the Nepra’s decision released on Thursday, the Power Division filed the motion of the federal government with respect to consumer end tariff recommendations of Discos and K-Electric so as to consider and approve the above tariff rationalisation for all consumers of Discos and K-Electric (except lifeline) for the period of April — June 2025.
The regulator is of the view that since the impact of any such decision is to be made part of the consumer end tariff, therefore, the authority, in order to provide an opportunity of hearing to all the concerned and in the interest of natural justice, decided to conduct a hearing in the matter which was conducted on March 28, 2025.
During the hearing, while responding to other queries raised by Arif Bilwani, the Power Division explained that expected PDL collection for the FY 2025-26, would be considered at the time of annual rebasing of tariff for the FY 2025-26, after approval of the Cabinet. On the point of subsidy, the MoE explained that federal government allocated around Rs266 billion for the FY 2024-25, which after inclusion of currently proposed relief of Rs58.6 billion @ Rs1.71/kWh, would become Rs325 billion. Representative of CPPA-G explained that category wise relief would be different depending upon applicable taxes for the relevant category.
Upon inquiry from Abubakr Ismail, the MoE explained that relief of Rs1.71/kWh shall be applicable to all consumers of Discos and K-Electric except life line consumers. While responding to the query of regarding B-4 tariff, the MoE explained that existing peak rate for B-4 category is Rs40.76/kWh, which after reduction would become Rs34.78/kWh. Similarly, B-4 Off-Peak rate is Rs36.38/kWh, which would reduce to Rs30.40/kWh.
The NEPRA in its decision has stated that the authority noted that the ministry has not requested for any change in the Nepra’s determined tariff/revenue requirement of DISCOs, rather has decided to use the petroleum development levy (PDL) to provide additional subsidy to electricity consumers of Discos and K-Electric except lifeline @Rs1.71/kWh, from April 2025 to June 2025. Further, no objection was raised by any stakeholder.
Copyright Business Recorder, 2025
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