Govt notifies 11 paisa per unit increase in power tariff

Tariff adjustment has been made for first quarter of FY20

ISLAMABAD: The government has notified an increase of 11 paisa per unit in electricity prices in a bid to apply a uniform tariff to all categories of consumers, except for domestic consumers.

The tariff increase has been notified on account of periodic tariff adjustment for the first-quarter (Jul-Sept) of fiscal year 2019-20, as determined and recommended by the National Electric Power Regulatory Authority (Nepra).

Earlier, the power-sector regulator had decided to transfer the burden of Rs14.780 billion on to consumers on account of power purchase price adjustment for the first quarter of FY20.

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Nepra notified an increase of 14.56 paisa in the power tariff on account of power purchase price adjustment for the quarter.

According to Nepra officials, the tariff has been increased by 26 paisa per unit for commercial and industrial consumers. However, domestic consumers consuming less than 300 units per month are exempt from this hike while the domestic consumers using more than 300 units will be charged seven paisa per unit.

Consumers of the privatised K-Electric are also exempt from this tariff increase.

The quarterly tariff adjustment will be applicable from December 1 for the next 12 months. Under this adjustment, the government would collect around Rs15 billion over the 12-month period. The Power Division has issued a notification in this regard.

The Power Division said the tariff adjustment had been notified along with the tariff differential subsidy for domestic consumers and additional charge of Rs0.11 per unit for maintaining uniform tariff for all categories of consumers (except for domestic consumers) so that the consolidated revenue requirement, approved and determined by Nepra on November 26, 2019, was maintained.

The tariff adjustment will be shown separately in the consumer bills by the state-owned power distribution companies.

"Pursuant to Section 31(7) of the Regulation of Generation, Transmission and Distribution of Electric Power Act 1997, the federal government is pleased to notify the adjustment in the approved tariff, on account of periodic adjustments for first quarter of FY20, as determined and recommended by Nepra vide decision of November 26, 2019 in respect of IESCO (Islamabad Electric Supply Company), as Schedule I & II," the notification said.

Nepra has determined a uniform rate of Rs0.1456 per kilowatt-hour (kWh) for the permitted quarterly adjustment of Rs14,780 million pertaining to the first quarter of 2019-20 across each category of consumers of ex-Wapda distribution companies, to be recovered in 12 months, based on projected sales for fiscal year 2017-18, after excluding lifeline consumers," said a notification issued by Nepra earlier.

The distribution companies had filed a petition for adjustments on account of variation in the power purchase price for the first quarter (Jul-Sept 2019). The government requested a tariff increase of 17 paisa per unit to generate additional revenue of Rs17.2 billion for the distribution companies.

Nepra conducted a public hearing of the petition filed by the distribution companies for transferring the burden of Rs17.2 billion to the power consumers and reserved its judgement.

Published in The Express Tribune, December 7^th, 2019.

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