Nepra cuts tariffs for Iesco and Gepco consumers

National Electric Power Regulatory Authority (Nepra) here on Monday significantly reduced the power tariff for residential, commercial, industrial and agricultural consumers of the Islamabad Electric Supply Company (Iesco) and Gujranwala Electric Power Company (Gepco), ranging from 3 paisa to Rs 2.41 per unit.
Nepra also announced that new tariff will be applicable from the date of notification by the Federal Government in the official gazette.
The notification issued by the regulatory authority said that power tariff for the residential consumers of Iesco has been lowered by 14 paisa for those consuming up to 300 units and Rs 2.41 for commercial consumers, while industrial consumers will get reduction of 72 paisa and agricultural consumers 79 paisa.
However, average reduction announced for Gepco is residential 3 paisa/unit, commercial Rs 1.04, industrial 79 paisa and agricultural 52 paisa.
Nepra statement said that the revised lower rates allowed to Iesco and Gepco would be particularly helpful in generating the commercial activity and reducing in put cost of manufacturing and agriculture, helping economy to be more competitive in the forthcoming WTO regime.
Consequent to the restructuring and unbundling of Wapda Power Wing and incorporation of independent generation, transmission and distribution companies, the tariff to be charged by the generation and transmission companies has already been determined by the authority.
The final step in the completion of the restructuring is the tariff determination for the eight distribution companies (Discos).
Iesco and Gepco had requested the Nepra to allow a distribution margin and passthrough of power purchase costs in the shape of a multi-year tariff for the next five years, which is sufficient to maintain its financial health besides provision of reliable service to its consumers.
While determining tariff, the authority has claimed the prudent costs of the companies required providing reliable service at the most economic rates.
Nepra notification said that incentives have been provided to reduce costs particularly losses in the distribution system by allowing a performance based tariff.
The power authority has found that since there was a large percentage of industrial and commercial consumers in the territory of the two companies, the present rates will result in revenue increase, which is more than the prudent cost.
Therefore, the average sale rates of the two consumers have to be lowered to equate the revenue increase to the prudent cost of the company and allowed reasonable return on their assets employed in the business.