The National Electric Power Regulatory Authority (Nepra) on Monday reserved its decision on the government’s request to jack up electricity tariff for Karachi electric (KE) consumers by Rs6 per unit.
The regulator conducted a public hearing to consider the federal government’s request for tariff increase.
The government sought the tariff hike on account of two different quarterly adjustments. It also requested for making additional collection from the people of Karachi from April to June 2023.
During the hearing, Nepra officials said that the federal government had filed request for an increase in electricity prices on account of quarterly adjustments to maintain uniform tariff across the country.
The officials announced that the electricity company would collect an additional amount of up to Rs4.45 per unit from April to May 2023, and another extra amount of Rs1.55 per unit from April to June 2023.
Owing to the increase in tariff, the consumers of K-Electric (KE) will bear an additional burden of Rs20 billion.
The government submitted an urgent motion to apply up to Rs4.45 per unit in the first quarter of the financial year 2022-23 (July to September) and Rs1.55 per unit
In the second quarter of 2021-22 (October to December), which the regulator had previously determined for the ex-Wapda power distribution companies (DISCOs).
Average hike in tariff for KE consumers will be Rs3.21 per unit in the first quarter of FY23 and Rs1.55 per unit in the second quarter of FY22.
Nepra had previously approved a tariff hike of up to Rs4.45 per unit, allowing DISCOs to transfer an additional burden of Rs42 billion to the consumers on account of quarterly adjustment for the first quarter of current fiscal year.
It directed that the additional burden would be transferred in February and March, which would have an average impact of Rs3.30 per unit.
The decision will increase the per-unit cost for different categories of consumers in the range of Rs1.4874 to Rs4.45 per unit.
In accordance with the National Electricity Policy 2021, the government may maintain a uniform end-consumer tariff for KE and state-owned DISCOs (even after privatisation) by incorporating direct/ indirect subsidies.
In order to meet its revenue requirement, as determined by the regulator and consistent with the national tariff of DISCOs, KE needs to modify its applicable uniform variable charge.
Keeping that in view, the federal government filed an instant motion with respect to the end-consumer tariff recommendations of KE to maintain uniform tariff across the country.
The move was also intended to synchronously recover the KE’s revenue requirement, determined by Nepra, while considering the proposed targeted subsidy and cross-subsidies.
Published in The Logical Baat, April 4th, 2023.