40% power tariff hike passed on to most consumers

Power distribution companies charge consumers the same rates as those using 700 units a month.

ISLAMABAD:

The federal government has apparently misled both the Supreme Court and citizens alike by quietly passing on up to a 40% increase in electricity prices to even those domestic consumers who use less than 200 units a month.

During a hearing of the suo motu case on the power tariff issue, the government had assured the Supreme Court that the hike in electricity prices would not apply to consumers who use up to 200 units a month. Prime Minister Nawaz Sharif had also pledged that the same consumers – who belong to the low income bracket – would be exempt from the increase.

Power distribution companies, however, have increased the tariff for most consumers regardless of their monthly consumption based on the federal government notification which gave effect to the new prices.

The notification stated that the 40% increase in prices was to be passed on to all consumers who use smart or ‘Time of Use’ electricity meters, which apply different rates for daytime and nighttime. Power companies have forced most consumers across the country to use Time of Use meters, without making any distinction between their income brackets.



According to the notification, the new off-peak rate for domestic consumers who use Time of Use meters is Rs12.50 per unit, up from Rs8.90. Similarly, the peak hours electricity rate has been increased to Rs18 per unit from Rs13.99. Consumers who use smart meters but consume less than 200 units a month are charged Rs18 per unit during peak hours, same as consumers who use more than 700 units a month.

Fresh bills issued by the Islamabad Electric Supply Company (IESCO) for the month of October confirmed consumers were charged according to the new rates, irrespective of the relief granted to consumers who use less than 200 units a month. An electricity consumer in IESCO’s jurisdiction was billed Rs2,182 despite using only 134 units in October. The consumer’s off-peak time consumption was 107 units, for which he paid Rs12.50 per unit.

When approached, IESCO Superintendent M Altaf said that the exemption from the increase in electricity prices did not apply to consumers using Time of Use meters. He produced the government notification in his defence.

When contacted by The Express Tribune, a top finance ministry official insisted the premier had not approved any increase in the power tariff for consumers using less than 200 units a month, regardless of whether they used smart meters or not. He said power distribution companies had issued the wrong bills and the mistake would be rectified ‘within 48 hours’.

However, even after five days, neither the Ministry of Finance nor the Ministry of Water and Power issued any clarification in this regard. Despite repeated attempts, the spokesman for the ministry of water and power Zargham Eshaq Khan was not available for comments.

The government increased power rates last month under structural reforms agreed with the International Monetary Fund (IMF) for the Extended Fund Facility loan, which amounts to $6.67 billion. At the time, Finance Minister Ishaq Dar had also announced the government would subsidise power rates for consumers who use less than 200 units a month and bear Rs140 billion in subsidies this year.

Published in The Express Tribune, November 30^th, 2013.