ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved recovery of additional surcharge of Rs 1.52 per unit from K-Electric consumers during the next twelve months, starting from December 2023 to end in November 2024.
Following the NEPRA’s decision and a notification of the federal government in this regard, Rs 1.52/unit will be recovered in 12 months, in terms of Section 31, sub-section 8 of NIEPRA Act, for recovery of Rs 24.5 billion from the consumers of K-Electric.
NEPRA, in its decision dated 22nd November, 2023 on a motion filed by Ministry of Energy (Power Division) with respect to recommendation of consumer end tariff for K-Electric, said that the Authority (NEPRA) has decided to allow the recovery of Rs. 1.52/kWh from the consumers of K-Electric, except life line, for a period of twelve months from December 2023 to November 2024. The Authority has also decided to issue a separate SoT in this regard as per the request of the MoE.
K-Electric spokesperson, in a statement, clarified that NEPRA’s notification aligns with an ECC decision related to charges from the previous tenure. The extended duration in finalizing KE’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. Operating within the regulated framework of Pakistan’s power sector, KE, like other DISCOS, adheres to decisions made by the government of Pakistan and NEPRA concerning power tariffs.
Earlier, the Ministry of Energy (MoE) submitted Motion vide letter dated July 19, 2023, with respect to recommendation of consumer-end tariff of K-Electric under section 31 of the NEPRA Act, 1997 read with rule 17 of NEPRA Tariff (Standards and Procedure) Rules, 1998, for application of surcharge.
The MoE in the Motion submitted that NEPRA determined the Multi Year Tariff of K-Electric vide decision dated July 05, 2018, duly notified by the Federal Government on 22.05.2019, modified from time to time to maintain uniform tariff in the country.
The MoE further stated that during the period from July 2019 to September 2020, the consumer tariff of K-Electric was not increased uniformly as compared to DISCOs due to pending decisions at various forums. Due to this pendency, the impact of such adjustment was not passed on to the consumers of K-Electric resulting in an impact of Rs. 24.5 billion, MoE stated in its said Motion.
Upon inquiry from the Authority, it was explained by the Ministry that during past five years, K-Electric subsidy has been around Rs.416 billion. Similarly for the FY 2023-24, the Government has budgeted a subsidy of Rs.976 billion for the Power Sector including Rs.298 billion for the K-Electric. The MoE also confirmed during the hearing that no other previous quarterly adjustment is pending to be charged from the consumers of K-Electric that has already been recovered from the consumers of DISCOs, except for the three quarters of FY 2022-23. For these three pending quarters of FY 2022-23, the Policy Guidelines in light of decision of the Authority dated 22.05.2023 are under approval and once approved, motions for recovery of cost for these quarters from K-Electric consumers would also be filed with the Authority for approval. The MoE submitted that financial sustainability of sector is compromised, if prudent cost of electricity is not compromised.
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The Authority in order to provide an opportunity of hearing to the petitioner (MoE), relevant stakeholders and to meet ends of natural justice, decided to conduct a hearing on the issue.
A hearing in the matter was held on August 15, 2023, for which advertisement was published in newspapers and separate notices were also sent to the stakeholders for inviting comments from the interested/affected parties.
Most often, a surcharge is levied for the following purposes, namely; (a) funding of any public sector project of public importance to the extent decided by the Federal Government; and
(b) fulfillment of any financial obligation of the Federal Government with respect to electric power services to the extent decided by the Federal Government.
