ISLAMABAD, March 7: The federal government's task force on power tariff has recommended an immediate reduction of 54.3 paisa and 15 paisa per unit in the consumer rates of Wapda and KESC respectively, authoritative sources in the power ministry told Dawn.
One year after these reductions have been effected, a further reduction of 50 paisa and 60 paisa per unit in the consumer tariff of Wapda and KESC respectively over a period of 4 to 5 years has been recommended by the task force headed by former secretary water and power Mirza Hamid Hassan.
Besides, it has also been proposed to create a new slab of 51-100 units of consumers to provide 52 paisa additional tariff relief to consumers of both Wapda and KESC. This measure would benefit 2.7m consumers of Wapda and 0.245m consumers of KESC, the sources said.
The average tariff reduction of 54.3 paisa per unit to be available in the short-term has been proposed to be so distributed, as to provide higher relief to industrial, commercial, bulk and higher slabs of domestic consumers because they were currently subsidizing other consumer categories.
On the other hand, a number of petitions filed by corporate companies of Wapda seeking tariff increase are currently awaiting public hearing to be conducted by National Electric Power Regulatory Authority (Nepra). The task force has opposed these petitions, Nepra sources confirmed.
The report blamed former Wapda chairman whose non-cooperation in the supply of relevant data delayed finalization of the report. It was finalized in nine months instead of two months, the deadline given to it.
The 22-member task force comprising parliamentarians, former and incumbent senior government and Wapda officials has submitted its report to the Minister for Water and Power Aftab Ahmad Sherpao.
The report although did not suggest any drastic policy shifts or reduction in federal tax rates on electricity which form more than 20 per cent of the tariff, would be scrutinized in the coming week by a three-member ministerial committee comprising ministers for Finance, Water and Power and Petroleum and Natural Resources before its formal approval by the federal cabinet.
The task force has proposed to fix time-bound loss reduction targets for Wapda and KESC which would provide a tariff reduction of 6.3 paisa and 15 paisa per unit for Wapda and KESC respectively during the first year.
Further reduction in line losses over the period of 4 to 5 years would provide another relief of 25 paisa and 60 paisa per unit to Wapda and KESC consumers respectively.
The task force has suggested abolishing of provincial electricity duty and hydel surcharge (both provincial taxes) to immediately reduce tariff by another three paisa and 11 paisa per unit respectively.
It proposed to shift subsidies on agricultural consumers from Wapda to the federal and provincial governments to reduce Wapda tariff by another 15 paisa per unit. It has suggested to pass on Rs2 billion or 10 paisa per unit to the consumers out of a Rs13 billion saving arising out of Ghazi Barotha Hydropower project.
Another nine paisa per unit reduction has been proposed through ongoing fuel conversions in Kot Addu (six paisa) and Rousch (three paisa) power projects. It called for a rescheduling of a minor portion of about Rs150 billion Wapda debt to the federal government to provide a relief of 20 paisa per unit in Wapda tariff over five years.
Replacement of Wapda's faulty meters would reduce tariff by another five paisa in the next four years. At present, about Rs15.6 billion subsidy is available to the Wapda consumers.
This includes Rs11.7 billion subsidy to small domestic consumers and Rs3.9 billion to agricultural tube wells. This subsidy comes Rs7.9 billion from commercial consumers, Rs5.2 billion from industrial and Rs2.2 billion from bulk consumers.
