Incremental consumption package: Nepra questions PD over ‘negligence’

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday questioned the Power Division over its ‘negligence’ to consult the industry before finalising a three-year incremental electricity consumption package priced at Rs 22.98/kWh for industrial and agricultural sectors.

The package, based on an assumed 25 percent aggregate growth in consumption, has been criticised by industry representatives as discriminatory and distorted.

The Authority — comprising Chairman Waseem Mukhtar, Member (Technical) Rafique Ahmad Shaikh, Member (Development) Maqsood Anwar Khan, and Member (Law) Amina Ahmed — conducted a lengthy public hearing.

Industrial, agri consumers: PD asks Nepra to approve three-year incremental package

The Power Division’s team, led by Additional Secretary Mehfooz Bhatti and Naveed Qaiser, and AbidLodhi, defended the incremental package, which has already been approved by the federal cabinet.

According to officials, the package will apply to both Discos and K-Electric consumers and will be subsidy-neutral, with no adverse impact on other consumers. Only positive Fuel Cost Adjustments (FCAs) will apply to beneficiaries, while QTA, DSS, and negative FCAs will not be applied to incremental consumption. Semi-annual reviews will be held to ensure revenue alignment and adjust marginal tariffs if demand exceeds the 25 percent aggregate growth level.

However, representatives from the All Pakistan Textile Mills Association (APTMA), Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Karachi Chamber of Commerce and Industry (KCCI), and others rejected the proposed package. They argued that the plan, despite government claims that it is unrelated to the International Monetary Fund (IMF), remains flawed and non-consultative.

K-Electric, which the Power Division said was part of the consultation process, also raised concerns, stating that several assumptions in the package are based on outdated data.

Member (Technical) Rafique Ahmad Shaikh questioned whether it would not have been better for the Power Division to consult the industry beforehand to find a middle ground that satisfied both the government and stakeholders.

“Is there no mechanism to seek input from the industry ahead of the approval or drafting of such packages?” he asked.

“If the NEPRA proposes changes, the Power Division will have to seek fresh cabinet approval that will prolong the process. Would it not be better to engage with the industry now and bring a revised package?”

Responding to these observations, Additional Secretary (Power Finance) Mehfooz Bhatti said the government understood that the industry was under stress due to high tariffs but had to balance grid stability, fiscal space, and industrial demand. “It was the industry that demanded a three-year package, and we worked on that within our constraints,” Bhatti stated. “We cannot design packages for different sectors on an individual basis.”

Copyright Business Recorder, 2025