ISLAMABAD, April 20: The National Electric Power Regulatory Authority (Nepra) on Tuesday allowed three to four paisa per unit tariff reduction for commercial, industrial and bulk supply consumers of Karachi Electric Supply Corporation (KESC).

Under a seven-year formula, the power tariff of the KESC has to be adjusted on a quarterly basis to compensate for variation in fuel price and power purchase. On Jan 14 this year, Nepra allowed nine paisa tariff reduction for KESC consumers but the federal government had not yet notified it.

Nepra has now sent to the government a new schedule of tariff which incorporates the earlier as well as the current reduction in tariff. The current reduction of an average of two paisa per unit KESC tariff is due to variation in fuel price and power purchase rates during the quarter between January-March 2004.

There would be a tariff relief for residential and agriculture, public lighting and others as part of the government policy to achieve gradual reduction in cross subsidies. The power rates for commercial and industrial consumers have been reduced by paisa four per unit while for bulk supply consumers these have been brought down by three paisa per unit.

The January 14 tariff determination envisaged five paisa reduction each in residential and agriculture, 12 paisa each in commercial, public lighting and industrial tariff and 10 paisa reduction in bulk supply.

Putting together the determinations for the two quarters, Nepra has asked the government to notify a tariff reduction of 16 paisa each for commercial and industrial consumers, five paisa each for residential consumers and agriculture, 13 paisa for bulk supply and 12 paisa for public lighting.

Under the Nepra Act of 1997, the federal government is required to notify Nepra's determination within 15 days or seek its review. If the notification is not issued within the given 15 days, the Nepra determination is deemed to have taken effect but practically, the utilities could not change their tariff without a government notification.

The government, however, withheld the notification for more than three months to provide windfall benefit to the KESC to lower its deficit.