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ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has endorsed government’s first phase of power subsidy rationalisation plan, meant to reduce number of subsidy beneficiaries as per agreement with the donors.

Power Division, in its plan has already conveyed those power consumers who use over 201 units in a month will be removed from subsidy beneficiaries list and continue to be monitored for six months to include them in the list again.

Nepra held public hearing on August 9, 2021 on a petition of Power Division submitted after approval of Federal Government.

Power Division submitted the following proposals: (i) expanded definition of the lifeline consumers to include residential Non-Time of Use (ToU) consumers having maximum of last twelve months and current months’ consumption of 100 units; two rates for ~50 and 100 units will continue;(ii) create a new category of protected consumers (those consuming < 200 kWh per month consistently for the past 6 months) ;(iii) break the 301-700 slab into four slabs - 301-400, 401-500,501-600 & 601-700 with the same marginal tariff ;(iv) each of these slabs would continue to get the previous slab benefit of < 300 kWh slab; and (v) Federal Government intended to implement the proposal modified / adjusted tariff structure with effect from June 1, 2021.

Power subsidy rationalisation plan unveiled

The Authority noted that the MoE during the hearing submitted that the proposal has no financial implication on consumers and DISCOs. Similarly, in response to Nepra letter, the MoE on June 9, 2021 categorically stated that adjustment in Schedule of Tariff (SOT) pertain to structural changes only, rather than a change in the mechanism and the proposed phase-I of the policy guidelines does not envisage any change in the level of cross-subsidy as determined and notified by the Authority.

It has further been stated that detailed working for Phase-Il and Phase-Ill will be submitted for consideration of the Authority, before moving towards its implementation.

The Authority, based on the submissions of the MoE and keeping in view the proposed modifications/ adjustments in the DISCOs’ schedule of Tariff (SoTs) & terms & conditions, has approved Phase-I of the guidelines, to be applied prospectively, once the decision is notified. However, for Phase-Il and Phase-Ill, the Authority has directed the MoE to ensure provision of detailed workings including financial impact on each category of consumers, at the time of submission of Phase-Il and Phase-Ill to the Authority.

According to the regulator, approval of Phase-I of the Guidelines in no way be construed as basis for approval of Phase-Il and Phase-Ill of the Guidelines.

Copyright Business Recorder, 2021

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