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Quarterly Tariff Adjustment: Rs113bn impact to be shifted to KE consumers by way of surcharge

  • K-Electric may be directed that such surcharge collected shall be omitted to CPPA-G immediately to reduce the large outstanding payable
Published June 4, 2022
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ISLAMABAD: Power Division and Finance Division has reportedly evolved consensus to pass on Quarterly Tariff Adjustment (QTA) notification impact of Rs 113.1 billion to the consumers of K-Electric (KE) by way of surcharge of Rs 2.35/ unit to be recovered in three years, well informed sources told Business Recorder.

This proposal has been prepared in terms of section 31 sub-section 8 of NEPRA Act, so the need for government subsidies is minimized, with a view that principle of equity between consumer of Discos and K-Electric may remain intact.

Power Division has also proposed that it may be authorized to file a motion before NEPRA for incorporation of proposal A above in the Schedule of Tariff (SoT) of NEPRA determination of November 05. 2021.

NEPRA may be requested to issue revised SoT for KE with prospective application of applicable uniform rates after incorporating the proposal to notify in the official gazette by way of modification in SRO Nos.1429(1) 2021, 192(1)/2021, 1037(1)2020 and 575(1) 2019.

Rs7.91 hike in base tariffs of Discos approved

Further upon such notification, K-Electric may be directed that such surcharge collected shall be omitted to CPPA-G immediately to reduce the large outstanding payable. Both these proposals have also been supported by the Finance Ministry.

However, Finance Ministry has not supported Power Division’s proposal in which the latter has sought authority to utilize available budget by way of re-appropriation against the claims of zero-rated industry, FATA and AJK for which the budget is exhausted during current financial year.

According to sources, Finance Ministry argues that allocated funds may be fully utilized for outstanding KE’s TDS claims, if any, after verification/ reconciliation.

Power Division has been advised to verify/ reconcile the claims submitted by KE on provisional basis for the period October 2016 to March 2020 against subsidy releases made against these claims by the Finance & Power Divisions. After reconciliation claims may also be audited through Auditor General of Pakistan, the sources maintained.

Finance Division is also of the view that the provision of automaticity under the NEPRA Act regarding quarterly tariff adjustments with respect to DISCO’s consumer tariffs, KE’s consumers also be treated at par with those of DISCOs so the KE’s quarterly tariff adjustment be made timely to avoid any additional burden on the government of Pakistan that may create cash flow problems in the power sector.

Copyright Business Recorder, 2022


Comments are closed.

Asam Aziz Jun 04, 2022 12:07pm
KE made a stupid mistake by setting up oil and gas fired power stations instead of coal fired power stations in the past. Same stupidity was done by PMLN and PPP Govts in the past. Cement sector was intelligent because they quickly switched from oil firing to coal firing at the same time.
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Nay.aly Jun 04, 2022 03:18pm
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Nay.aly Jun 04, 2022 03:19pm
KE management is minting money from karachities ???
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