The National Electric Power Regulatory Authority (Nepra) has completed its hearing on the government’s request to revise electricity tariffs and fixed charges. A final decision is expected after reviewing the data.
Officials from the Power Division said the move could bring relief to the industrial sector, with tariffs likely to drop by Rs4.04 per unit. They added that, for the first time in a billing cycle, the Rs101 billion cross subsidy currently placed on industry would be reduced to zero.
Cross subsidy and system burden
According to officials, the industrial sector is presently providing Rs101 billion in cross subsidy to domestic consumers. Commercial users are contributing Rs90 billion, while general services users are bearing Rs35 billion.
They said net metering consumers have generated a total of 35 billion units of electricity. Had these users been on the national grid, there would have been a difference of Rs3 per unit.
Officials also stated that consumers still face a burden of more than Rs614 billion under taxes, duties and cross subsidies, while large consumers carry Rs453 billion under tariff differential charges. The Power Division noted that the time has come to assign costs more directly to the relevant consumers.
The briefing revealed that fixed charges have been increased from 7 percent to 10 percent. Due to net metering, the number of protected consumers has risen sharply from 9.4 million to over 21.5 million.
Focus on industry and regional competitiveness
Power Division officials said reducing tariffs is necessary to keep the country’s industrial sector running, as Pakistan currently has the highest industrial electricity tariff in the region. After restructuring, the industrial tariff is expected to fall to around 11.5 cents per unit, and to about 10.5 cents per unit for those using the three-year package.
They added that the decision to promote solar energy in the past was appropriate and that there has been no attempt to discourage net metering. According to officials, the solar and net metering policy was not wrong.
Proposed relief and fixed charges for domestic users
The government has proposed cheaper electricity for domestic users consuming more than 300 and 700 units per month. It has also suggested introducing fixed charges for households using up to 300 units, applying to both protected and non-protected consumers. Previously, only non-protected users consuming above 300 units were subject to fixed charges.
Under the proposal, protected consumers using up to 100 units per month would pay Rs200 in fixed charges, while those using up to 200 units would pay Rs300. Non-protected users consuming up to 100 units would pay Rs275, and up to 200 units would pay Rs300.
For non-protected consumers, fixed charges of Rs350 have been proposed for usage up to 300 units. Charges for 400 units could rise from Rs200 to Rs400, while for 500 units they may increase from Rs400 to Rs500. Fixed charges for 600 units are proposed to increase from Rs600 to Rs675.
However, fixed charges for usage up to 700 units may be reduced from Rs800 to Rs675, and for consumption above 700 units, a cut of Rs325 has been proposed, bringing charges to Rs675.
The proposal also includes reductions in per unit tariffs for domestic users. For monthly consumption of 400 units, a cut of Rs1.53 per unit has been suggested, Rs1.25 for 500 units, Rs1.40 for 600 units, and 91 paisa for 700 units. For usage above 700 units, a reduction of 49 paisa per unit has been proposed.
For commercial consumers with a load of 5 kilowatts or more, a reduction of Rs1.15 per unit has been suggested, while the industrial sector could see cuts of up to Rs5 per unit.
Nepra is expected to announce its decision after completing a detailed review of the submitted figures.
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