Regulatory policy

Uniform Tariff Policy: Power Div is requesting an increase of Rs 1.55/unit in the KE tariff

ISLAMABAD: The Electricity Division has reportedly requested the Cabinet Division to expedite the final approval of the Rs 1.55 per unit hike for K-Electric consumers under the Quarterly Tariff Adjustment Mechanism ( QTA) to ensure a uniform rate across the country.

This increase will be in addition to what was recently approved by the National Electric Power Regulatory Authority (Nepra) a few days ago.

Energy Division Section Officer Syed Mateen Ahmed in a letter to the Cabinet Division said the ECC reviewed the summary on July 20, 2022 and recommended it for Cabinet approval federal. However, Cabinet approval/ratification has not yet been forwarded to the Energy Division.

He said the issue was of urgent importance as it involves financial implications for the electricity sector. The billing cycle for the month of August starts from August 7, 2022 and in order to implement the resumption in the next three months, it is necessary to obtain the approval of the government to submit a motion to modify the fee schedule before Nepra well in time.

The Energy Division asked the Cabinet Division to share the status of the matter and requested that the matter be expedited to enable it to proceed with the filing of the motion before Nepra in time and to avoid any financial loss for the sector.

FCA mechanism: KE tariff for June raised by Rs 11.10/unit

Earlier in its summary to the ECC, Power Division stated that pursuant to Section 31(7) of the Nepra Act, NEPRA, in its determinations for Discos dated June 16, 2022, determined a periodic adjustment of the tariff for the 2nd quarter of the 2021-22 financial year for nightclubs. In light of its determination, Nepra has recommended a flat rate for the 2nd quarterly adjustment of the 2021-22 financial year for consumers of Discos for the three-month period.

According to Power Division, under the National Electricity Policy 2021, the government can maintain a uniform end-consumer tariff for K-Electric and public nightclubs (even after privatization) through the incorporation of direct/indirect subsidies. As a result, the uniform variable charge applicable to KE is to be amended to maintain the uniform tariff across the country, which will result in an impact of the tariff increase of Rs 1.5547/unit with a payback period of three months.

In view of Nepra’s decision, the Power Division submitted the following recommendations for consideration and approval by the Cabinet ECC: (i) tariff rationalization through adjustments may be approved for K-Electric ; (ii) Nepra may be contacted to issue a revised Schedule of Tariff (SoT) determined for the October-December 2021 quarter or incorporated into the latest price list determined by Nepra for the January-March 2022 quarter, after incorporating tariff changes and upon approval by Nepra, notify the Government Gazette by amendment in SRO No. 575 (1), 2019, as amended from time to time; and (iii) these adjustments will be applicable on July 2022, August 2022 and September 2022 consumption to be recovered from consumers in August 2022, September 2022 and October 2022, respectively.

Copyright Business Recorder, 2022