Incremental electricity package: APTMA submits recommendation to Leghari
ISLAMABAD: The All Pakistan Textile Mills Association (APTMA) has submitted its recommendations to the Power Minister regarding the proposed incremental electricity package for the industry, aimed at achieving demand stimulation, industrial growth, and optimal utilisation of existing generation capacity.
In a letter addressed to Power Minister Awais Ahmed Khan Leghari, APTMA Secretary General Shahid Sattar emphasised that any incremental usage package must be notified well in advance of its operational period.
Previous packages, including the most recent notification, were issued too late to allow the industry sufficient time to plan, procure input materials, or commit to enhanced production schedules. Predictability and adequate lead time are therefore essential.
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The APTMA is of the view that the new package should be based on clear strategic objectives. Combining goals— such as load balancing during winter, capacity charge mitigation, and industrial promotion— dilutes the effectiveness of each.
The association recommends that the government introduce separate packages explicitly targeting: (i) supporting incremental demand during the low-consumption winter months (to offset raw capacity charges), and (ii) promoting increased industrial and agriculture based electricity consumption, particularly among export-oriented sectors.
Sattar further stated that the baseline for measuring incremental consumption must be transparent and easy to implement.
The previous formula—based on a weighted average of three past years’ consumption was overly complex and, in many cases, disadvantaged consumers. “We strongly recommend that calendar year 2024 consumption be fixed as the baseline year for benchmarking incremental usage, as industries that shift from gas-fired captive power to the national grid in early 2025 would otherwise not qualify for the incremental benefits. If the package is introduced for a 3–5-year period, the same fixed baseline (CY2024) should be maintained throughout to ensure stability and encourage long-term planning,” he continued.
The Association further stated that all consumers connected to the national grid— whether through solar net metering or hybrid consumption arrangements under wheeling— should be eligible for the incremental package, given the primary objective is to enhance capacity utilization on the grid.
In addition to the broader incremental package, APTMA proposed the introduction of a dedicated winter electricity package covering the months of November to February.
“The package should offer lower tariffs reflecting the marginal cost of generation during low-demand months. All consumer categories should be eligible to encourage increased electricity use for space heating and cooking. This is financially feasible from the power sector’s perspective, as current power tariffs already account for capacity cost components during low-demand months, allowing for the application of cost-reflective marginal tariffs during this period,” Sattar said, adding that such a package would help flatten seasonal demand curves, improve plant load factors, and provide much-needed relief and competitiveness to domestic industry.
Copyright Business Recorder, 2025