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ISLAMABAD: The government has decided to promulgate Ordinance to amend the Nepra Act aimed at giving powers to Cabinet to impose surcharge up to 10 percent of aggregate revenue requirement, sources close to SAPM on power told Business Recorder.

According to the agreement with the International Monetary Fund (IMF), Rs 1.43 per unit surcharge can be imposed on consumers anytime after the promulgation of Ordinance. In this regard, Power Division has sent a summary to Cabinet for approval. The summary says that the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 puts in place a system for transparent and judicious regulation of the electric power sector of Pakistan based on sound commercial principles and socioeconomic policies of the Government.

According to the summary, it is essential to introduce certain amendments in the Act for the following three purposes: a) To bring greater transparency in the system of determination of consumer end tariff through introduction of automaticity in the notification of such tariffs determined by NEPRA, b) To enable the Government of Pakistan to impose surcharges on electricity consumers with defined purposes (fund power sector projects of national importance and fulfil financial obligations of the Government in respect of electric power) and within specified constraints (not more than 10% of the revenue requirement of the DISCOs); Streamline the process of determination of uniform tariff,

A draft bill, including these amendments was approved by the Federal Cabinet for laying before the Parliament for consideration. The bill was introduced in the National Assembly on June 18 2020 and was referred to the Standing Committee on Power. The National Assembly Standing Committee on Power has cleared the bill, after significant changes, in its meeting held on 14 March, 2021. The bill will now be sent to the National Assembly for consideration and approval and subsequently to the Senate for its process. At present, both houses of Parliament are not in session. The Cabinet Committee on Energy (CCE) has considered and approved a circular debt management plan for the next two years. The decision of the CCoE has also been ratified by the Cabinet on March 16, 2021. The plan assumes that the principle of automaticity will have taken effect by the end of the instant month. Power Division is of the view that in order to show the resolve of the Federal Government regarding the implementation of the Circular Debt Management Plan, and streamlining the tariff determination process, it will be essential to introduce the amendments as early as possible. It is, therefore, proposed that the said amendments may be introduced through an Ordinance.

Copyright Business Recorder, 2021

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