ISLAMABAD: The federal government has taken swift action to address consumer-end tariff recommendations of power distribution companies (Discos), including K-Electric.
The government has filed an ‘Instant Motion’ with the National Electric Power Regulatory Authority (Nepra) aiming at establishing a uniform schedule of tariff for power consumers by incorporating targeted subsidies and rationalising inter-distribution companies’ tariffs.
Notably, on July 14, Nepra announced a substantial increase in the electricity base tariff for the fiscal year 2023-24, allowing for a Rs4.96 per unit rise. The move will collect Rs3.281 trillion from power consumers across all distribution companies during the current fiscal period.
The new tariff rates, effective from July 1, will be Rs29.78 per unit, up from the current Rs24.82 per unit. For consumers using the ToU (time of use) meter, the peak hour rate will be Rs49.35 per unit (from 5 pm to 11 pm) and Rs33.03 for out-of-peak hours.
The government said that it reviewed the tariff schedules recommended by Nepra for each Disco for all consumer categories on July 14, 2023.
Following the policy, the government approved the application of a uniform tariff as per the provisions of section 31(4) of the Act. The approved uniform tariff, reflective of the federal government’s economic and social policy, was based on the consolidated revenue requirement authorised and determined by the authority for Discos owned and controlled by the federal government. This decision was made during the cabinet meeting on Friday and will be submitted to the authority for consideration under section 31(4) of the Act, along with targeted tariff differential subsidies, ensuring uniform tariff.
The government clarified that the inter-distribution companies’ tariff rationalisation is not intended to generate revenue for the federal government. Instead, it falls within the determined revenue requirements of the Discos as specified in section 31(4) of the Act.
Once considered and approved, this will lead to the determination of a ‘Uniform Final Tariff,’ to be notified by the government with effect from July 1, 2023, superseding the existing determined notified rate, inclusive of targeted subsidies and inter-distribution companies’ tariff rationalisation.
Additionally, the government may maintain a uniform consumer-end tariff for K-Electric and state-owned distribution companies, even after privatisation, through the incorporation of direct or indirect subsidies. To achieve this, KE’s applicable uniform variable charge will be modified to recover the revenue requirements determined by Nepra, including quarterly adjustments for the quarter ending June 2022. This modification will consider the proposed targeted subsidy and cross-subsidies, ensuring consistency with the proposed uniform national tariff of Discos.
