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ISLAMABAD: The Federal Government has decided to increase tariff by Rs 1.95/ kWh for consumers of Karachi Electric (KE) aimed at maintaining uniform tariff across the country, official sources told Business Recorder.

This issue came under discussion at the Economic Coordination Committee (ECC) of the Cabinet on January 28, 2021, presided over by the Finance Minister, Dr. Abdul Hafeez Shaikh.

The meeting was informed that this issue was received at the Cabinet Division as additional agenda after the deadline of seven days prior to the meeting, as stipulated in Rule 18(6) read with Rule 23(4) of the Rules of Business, 1973. Therefore, Secretary, Power Division requested the Chairman, ECC for consideration of additional agenda as urgently required. The Chairman, ECC allowed the request to table the summary; in consideration of proviso of the aforesaid rule.

The Power Division apprised that National Electric Power Regulatory Authority (Nepra), determined and recommended the multiyear tariff in its decision on July 05, 2018 (MYT of KE) for K-Electric Limited. The tariff determined by the Nepra, was duly notified by the Federal Government on May 22, 2019. Further, quarterly tariff adjustments determined by NEPRA on December 31, 2019 of eleven quarters, on the basis of last quarter April-June 2019, tariff was notified on October 12, 2020, to maintain a uniform tariff in the country.

NEPRA determined the Multiyear and single year regime tariff for Discos in December, 2020 and on the basis of these determinations, the Federal Government approved on January 15, 2021 an increase of Rs 1.95/ kWh as uniform consumer end tariff.

Further, the Federal Government, keeping in view the National Power Policy, 2013, approved by Council of Common Interest, which stipulated that the low-end consumers would be protected from any price escalation and tariff rationalization would be done in order to eliminate subsidy within industrial, commercial and bulk consumers as well as to provide a level playing field by providing power at comparable prices to all industrial users; and National Power Tariff and Subsidy Policy Guidelines, 2014, had approved the uniform consumer end tariff guidelines.

The Power Division further said that the decision of Federal Government was in the process of regulatory approval pursuant to Section 31(4) of the NEPRA Act. Further, similar adjustments by way of tariff rationalization in KE consumer end tariff were also required to maintain uniform tariff between consumers of Discos and those of K-Electric. Such tariff rationalization by way of adjustments would remain within the revenue requirement approved by Nepra for KE.

The Power Division submitted the following proposals for consideration of the ECC: (i) tariff rationalization by way of adjustments inclusive of Rs 1.95/kWh for K-Electric similar to Discos to maintain uniform tariff across the country and ;(ii) such adjustments be reflected by way of modification in SRO Nos. 575(1)/2019 and 1037(1)/2020. While the chair invited comments from the forum, no objection was raised to the proposal.

Copyright Business Recorder, 2021

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