KE consumers to pay Rs1.52 more

Decision to put additional burden of Rs24.5 billion on consumers

ISLAMABAD:

The consumers of K-Electric (KE) are set to face another price hike, as the National Electric Power Regulatory Authority (Nepra) granted approval for electricity charges of Rs1.52 per unit on Thursday.

The decision had been taken in line with June 2023 directive of the Economic Coordination Committee (ECC). The adjustments will reflect on monthly electricity bills from December 2023 to November 2024 and impose an extra burden of Rs24.5 billion on KE consumers. The notification for the purpose has been issued.

Meanwhile, lifeline consumers are exempted from the hike in charges, providing relief to this specific consumer group. A motion filed by the Ministry of Energy (MoE) for the application of surcharge stated that during the period from July 2019 to September 2020, the consumer tariff of KE was not increased uniformly as compared to XWDISCOs due to pending decisions at various forums.

Due to this pendency, the impact of such adjustment was not passed on to the consumers of KE resulting in an impact of Rs24.5 billion, it said. The motion noted that in accordance with the National Electricity Policy, 2021, the government may maintain a uniform consumer-end tariff for KE and state-owned distribution companies (even after privatization) through incorporation of direct or indirect subsidies.

Read more: Power tariff may be jacked up by Rs3.5 per unit

Accordingly, KE's consumer tariff is also required to be modified so as to recover the revenue requirements of the entity, determined by the authority and consistent with the uniform national tariff of XWDISCOs. The tariff has been approved by the government and it was decided that it should be submitted to the authority for consideration in terms of the provisions of the Act.

During MoE motion hearing, the ministry explained that during the past five years, KE subsidy had been around Rs.416 billion. Similarly, for the FY 2023-24, the government had budgeted a subsidy of Rs976 billion for the power sector including Rs298 billion for KE. The ministry also confirmed during the hearing that no other previous quarterly adjustment was pending to be charged from the consumers of KE that had already been recovered from the consumers of XWDISCOs, except for the three quarters of FY 2022-23.

The KE spokesperson clarified that Nepra’s notification aligns with the ECC decision related to charges from the previous tenure. The extended duration in finalizing the entity’s tariff has been a contributing factor to the current circumstances, resulting in lower charges from Karachi in comparison to other regions in the country, he added.

The KE spokesperson maintained that operating within the regulated framework of country’s power sector, KE, like other DISCOS, adhered to decisions made by the government and Nepra concerning power tariffs.