ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has revised industrial tariffs of Discos and KE, besides abolishing Time of Use (ToU) charges, in accordance with the decisions of the ECC, CCoE and Cabinet.
According to Nepra's decisions, the Authority noted the federal government's direction whereby there would be no subsidy requirement to the extent of Rs12.96/kWh, however for the period from November 1, 2020 to June 30, 2021, whereby the rate of Rs 12.96/kWh is to be reduced to Rs8/kWh for B1, B2 and B3 consumers, the impact on subsidy would be around Rs14 billion.
The Authority says, it does not see any issue in this regard as it is a subsidy neutral proposition in general to the extent of Rs 12.96/kWh, however, for the specific period of eight months i.e. November 15, 2020 to June 30, 2021, the Government has already decided to meet the subsidy requirement of around Rs 14 billion for the reduced rate of Rs8/kWh from Covid Economic Stimulus Package on actual consumption basis for each month. Thus, the Authority approved both proposals.
The Authority endorsed the proposal of the Federal Government that rate of Rs12.96/kWh on incremental consumption basis shall be applicable for all hours of the day till April 30, 2021.
The Authority on the proposal of the Federal Government for calculation of reference consumption for consumers having no reference consumption available during the period March 2019 to February 2020 considered the proposal as satisfactory. No Quarterly adjustments would be passed on to Bl, B2, B3 and B4 industrial consumers to the extent of incremental sales till continuation of the instant package, as the capacity charges would be actualized from the previous level of corresponding months sales. Positive monthly FCA would be applicable to B1, B2 and B3 industrial consumers on the incremental sales till continuation of the instant package, however, negative FCA would not be allowed to B1, B2 and B3 industrial consumers i.e. consumers paying Rs.8/kWh subsidized rate on incremental sales, from 1st November 2020 to 30th June 2021. The amount so retained by Discos, if any, would be off-set against the overall GoP subsidy.
B-4 consumers, who are paying Rs12.96/kWh for the incremental sales would be allowed the impact of positive monthly FCAs, till continuation of the instant package. The Authority further stated that it has no objection in approving the proposal for industrial consumers, as it does not have any impact on NEPRA determined tariff, as the Federal Government intends to further reduce the peak rate for industrial consumer through provision of additional subsidy. Hence, the Authority approved the proposal as submitted by GoP whereby, during peak hours the off peak rate along with applicable quarterly adjustments would be charged from November 01, 2020 till April 30, 2021 and the difference in this regard would be picked up by the GoP as subsidy. Karachi Electric - The Authority has considered the request of the Ministry of Energy and agreed with the proposal regarding special rate for industrial consumers on incremental consumption. However, keeping in view the fact that K-Electric tariff structure is different from Discos whereby, as per K-Electric's MYT MLR decision of October 9, 2017, the risk of sales, whether positive or negative lies with K-Electric, therefore, the discount of Rs4.96/kWh for B1, B2 & B3 industrial consumers from the base rate and difference regarding rate of Rs12.96/kWh for B4 & B5 industrial consumers, for incremental sales would be picked up by the GoP as tariff differential subsidy.
Positive monthly FCA would be applicable to B1, B2, B3, B4 and B5 industrial consumers on the incremental sales till continuation of the instant package, however, negative FCA would not be allowed. The amount so retained by K-Electric, if any, would be adjusted in the subsequent quarterly adjustments of K-Electric.
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