ISLAMABAD: The All Pakistan Textile Mills Association (APTMA) has urged Power Division to address inaccuracies in Grid Transition Levy and revise it as per the prevailing electricity tariff rates.
In a letter to Power Minister, Sardar Awais Ahmad Khan Leghari, Secretary General, APTMA, Shahid Sattar has said that the issues pertaining to the Grid Transition Levy in his notice warrants urgent review and rectification.
APTMA also shared detailed calculations with the Minister to show that the applicable levy as per the methodology framed by the Ordinance comes to be a negative adjustment of Rs 556.31/ MMBTU instead of currently imposed Rs 791/ MMBTU.
APTMA urges govt to re-evaluate grid levy on industrial CPPs
According to the letter, the Grid Transition Levy was notified at Rs. 791/ MMBTU on March 7, 2025. Since this notification, grid electricity tariffs have undergone downward revisions through reductions of Rs 1.70/kwh through the Tariff Differential Subsidy (TDS), Rs 1.90/kWh on account of the Quarterly Tariff Adjustment (QTA), and Rs. 1. 66/kWh on account of Fuel Price Adjustment (FPA).
The FPA of negative 0.90/kWh is expected for April 2025 based on CPPA-G statements during the recent NEPRA hearing. Collectively, these adjustments reduce the electricity tariff by Rs. 5.26/kWh, thereby directly lowering the levy from Rs 791/ MMBTU to Rs. 208/MMBTU, based on the methodology used by CPPA-G.
Furthermore, the current levy calculation is based on the peak industrial power tariff, which applies only for four hours per day. The remaining twenty hours fall under the off-peak tariff. A separate levy should therefore be calculated and applied for the off-peak duration to accurately reflect the true cost of grid electricity.
In addition to this, critical errors have been identified in the computation methodology that led to incorrect inflation of the levy: (i) the captive O&M cost of Rs 1.65/kWh is based on an outdated NEPRA determination from eight years ago. When indexed to Rupee depreciation (Rs 168 %) and inflation (155%), the updated value is Rs 4.31/kWh ;(ii) the Rs 3.23/kWh Debt Service Surcharge (DSS) has been included as part of the NEPRA notified tariff.
This is incorrect as it constitutes an additional surcharge and not a component of the power tariff itself, as notified by NEPRA ; and (iii) the Ordinance explicitly states that the rate of the levy shall increase by 5 % immediately, and upto 20% gradually. This margin is applied erroneously on the B3 tariff instead.
“We request that the pointed out discrepancies be addressed on priority, and that a revised levy accurately reflecting prevailing power tariffs and their hourly distribution across peak and off-peak durations-be notified at the earliest,” said the Association.
Meanwhile, the Directorate General of Gas (Petroleum Division) has sought opinion of Law Ministry on the recovery of Levy on Captive Power Plants.
In a letter to concerned stakeholders Directorate General of Gas has clarified that since billing for the months of February and March 2025 has already been done by Sui companies whereas notification of CPP levy rate of March 7,2025 remained suspended until amended order was issued by the Islamabad High Court, therefore, a mechanism for recovery of levy arrears for the said months while remaining with the legal framework of the CPP Levy Ordinance, 2025 is being worked-out.
In this context, legal opinion has been solicited from the Law and Justice Division as well AG Office in the matter of retrospective applicability of notified rate of levy of March 7, 2025 for the said months as well as its recovery thereof from consumers.
According to DG(Gas) it is understood that notification of rate of CPP levy of March 7, 2025 is in field and has not been withdrawn, however, as soon as clarity on the above legal query is received, Petroleum Division will advise the Sui companies to proceed accordingly.
Copyright Business Recorder, 2025
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