In a decision that will impact the pockets of residents, the National Electric Power Regulatory Authority (NEPRA) on Friday allowed K-Electric to recover an additional Rs1.7178/unit from its clients in their January-February and March 2024 bills.
The additional charge, greenlit by NEPRA, is attributed to two positive Quarterly Tariff Adjustments (QTAs) of the fiscal year 2022-23.
The move is likely to escalate the financial burden on Karachi's citizens in the first quarter of the upcoming year.
On December 6, the Ministry of Energy (Power Division) submitted a motion concerning the recommendation of consumer-end if for K-Electric based on certain sections of the NEPRA Act 1997 and a rule called Rule 17 from 1998 that deals with how tariffs (prices) are set by NEPRA.
The division also mentioned it has finalised the quarterly tariff adjustments for XWDISCOs for the second quarter FY2022-23 at Rs0.4689/kWh, and the recovery period spans three months, from April to June 2023.
Additionally, the authority has also determined the third quarterly adjustment for XWDISCOs for the same fiscal at Rs1.2489/kWh. The recovery period for this adjustment was three months, covering July to September 2023.These determinations have been duly notified and successfully recovered from the consumers of XWDISCOs.
It said that following the National Electricity Policy, 2021 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/indirect subsidies.
Accordingly, KE's applicable uniform variable charge is also required to be modified to recover the revenue requirements of KE determined by the authority, consistent with the uniform national tariff of XWDISCOs.
The same has been approved by the federal government and it was decided that the same be submitted to the authority for consideration in terms of the provisions of the Act.
The ministry further said that the Cabinet's Economic Coordination Committee (ECC) approved on August 7, 2023, the implementation of a uniform QTA to address delays in maintaining consistency for future K-Electric consumers. Guidelines were issued to NEPRA for this purpose.
The cabinet officially ratified the ECC's decision on August 9, 2023. The ECC, following the established guidelines, sanctioned the application of the third quarter tariff adjustment (QTA) for the fiscal year 2022-23 at Rs1.2489/kWh for K-Electric consumers on August 9, 2023.
It also highlighted that the authority, in a September 11, 2023 hearing, requested cabinet endorsement for applying XWDISCO's QTA of Rs0.4689/unit to K-Electric consumers in line with future NEPRA determinations.
The cabinet approved it on 10 November 2023.The federal government presented the case in a public hearing by NEPRA held on Dec 20, 2023.
The authority, after reviewing submissions from the federal government, the provided guidelines from the ministry, and stakeholder comments, acknowledged the federal government’s intent to standardise tariffs nationwide in alignment with the National Electricity Policy 2021.
Consequently, the authority approved the motion filed by the federal government.
The rate of Rs0.4689/kWh will apply to the consumption in April, May, and June 2023. This will be recovered from K-Electric consumers over three months from January 2024 to March 2024.
Likewise, the rate of Rs1.2489/kWh will apply to the consumption in July, August, and September 2023. This amount will be recovered from K-Electric consumers over three months from January 2024 to March 2024.
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