Industrial consumers: Government to restart billing of taxes, surcharges, fuel adjustment

Federal Government has decided to restart billing of taxes, surcharges and positive fuel adjustment from industrial consumers of power Distribution Companies (Discos) and Karachi-Electric (KE). In this regard, Power Division has written a letter to Chief Executive Officer of Power Information Technology Company (PITC) which prepares bills and sends to the Discos, directing to start recovery of those taxes, surcharges etc from industrial consumers which were exempted in the past.

Power Division's Section Officer (Tariff) Syed Mateen Ahmed, in his letter to the CEO, PITC stated that he has been directed to refer to Power Division's earlier communications including letters written on February 8, 2019 and March 29, 2019 on the billing by power Distribution Companies (Discos) through which it was communicated that on account of various representations made by the All Pakistan Textile Mills Association (APTMA) and as an interim measure subject to confirmation by the Finance Division, the zero rated industry would be charged 7.5 cents/Kwh tariff and that the financial cost surcharge, Neelum-Jehlum surcharge, taxes, fixed charges and positive fuel adjustment will not be charged to the zero rated industry.

According to the letter, the representations made by APTMA and the financial implications of the facility were discussed with the Finance Division. On account of no budgetary allocation for the purposes of financial cost surcharge, Neelum-Jehlum surcharge in FY 2018-19 or in the current financial year, the Finance Division has communicated that being, pass-through items, these should be duly recovered as per tariff notifications from industrial consumers as the subsidy is only meant for furtherance of pro-poor government policy. Therefore, any further subsidy over and above the allocated subsidy, being the differential between the base tariff notified through SRO Nos 1 to 10 of January 1, 2019 and SRO No 11(1)/2010 of January 1, 2010 for K-Electric and 7.5 cents/kWh towards zero rated industries, would be contrary to public interest.

The sources said that the matter was considered by the Federal Government, and it was decided and clarified that the concessionary rate of 7.5 cents/kWh for zero rated industrial consumers notified through SRO Nos 01 to 10 of January 1, 2019 and SRO No 11(1) 2010 of January 1, 2010 for K-Electric as amended from time to time to be billed to the consumers in addition to the already billed components.

Power Division has directed Power Information Technology Company that the federal government's decision may be implemented forthwith for the future billing by Discos.

The decision of the federal government is contrary to the decision taken by the ECC on October 24, 2018. The Power Division had assured the ECC in that meeting that the industrial consumers will continue to be provided with Rs 3/unit as Industrial Support Package (ISP) as its funding will be met through the efficiency of power sector by improvement in recovery and reduction in losses. The tariff change for the industrial consumers will remain within the revenue requirement. The five export oriented industries will be given a rate of $ 7.5 cents per unit.