LAHORE, Sept 1: Water and Power Development Authority defended on Monday the two-part tariff, calling it “revenue neutral” the purpose of which is to encourage higher consumption.

A Wapda spokesman said National Electric Power Regulatory Authority had been moved for the grant of two-part tariff on three grounds. It would encourage higher consumption, discourage stealing and help the authority utilize all installed capacity for which it had already been paying to the IPPs (Independent Power Producers).

Of the three main categories of Wapda consumers, the industry is already paying the two-part tariff. For domestic consumers, those consuming up to 100 units would not be touched by the proposed tariff structure, as they would continue to pay Rs1.40 per unit for the first 50 units and Rs2.52 for the next 50.

Tariff will come down from five to 28 per cent, depending on the consumption, for domestic consumers using more than 100 units. For those consuming between 100 and 300 units, tariff will come down from Rs3.12 to Rs2.95 per unit. For those consuming 301 units to 1,000 units, tariff will be reduced from Rs5.70 to Rs4.95 per unit, and for above 1,000 units, it would be reduced by 28 per cent (from Rs6.85 to Rs4.95 per unit).

Similarly, tariff rates for commercial consumers will also come down by 17 to 20 per cent.

For line consumers, tariff would be reduced from Rs6.88 to Rs5.50 per unit, and for the rest of units it will be reduced from Rs7.24 to Rs6, he said.

The capacity charge would be levied at Rs90 per kilowatt hour. Even if a domestic consumer has a sanctioned load of five kilowatt, he would be charged Rs450. But, his unit rate would come down by Rs1.90 per unit. That means, he would be compensated with only 200 units. This would not only encourage higher consumption, but also help Wapda utilize full installed capacity for which it was already paying to the IPPs.

However, the new formula would protect life-line consumers and those falling in lower slab of consumption. According to Wapda’s calculations, it would not hurt those maintaining consumption at the current level, but benefit those consuming more (than current level).

The authority hopes that it will reduce theft incidence by lowering the rate.

Wapda, the spokesman said, had also assured Nepra that it would not force consumers to adjust their installed capacity according to current consumption and try to fetch additional revenue. But, it would charge them at their present level of installed capacity, he claimed.

Nepra had rejected the two-part tariff request by Wapda last year, saying charging people for keeping few electric appliances would tantamount to levying tax on them, which, Wapda was unauthorized to do.