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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has decided, in principle, to exclude nearly 70 per cent of consumers – including places of worship – from the category of ‘lifeline consumers’ and is looking to withdraw the time-of-use tariff facility from commercial offices and cellular service providers.

The regulator has already completed the process of a public hearing on these matters and is expected to notify the decisions within a couple of days, a Nepra official told Dawn.

Know more: Nepra may change terms for domestic consumers

Under the existing arrangement, consumers who use up to 5 kilowatts are entitled to the lifeline rate of about Rs2 per unit, if they use less than 50 units per month. Nepra has decided that this facility will now only be available to consumers whose sanctioned load is under one kilowatt.

As a consequence, the regulator has also decided that consumers with a 5-kilowatt load would be charged Rs8.11 per unit if their monthly consumption exceeds 101 units per month. For those using less than 100 units, the monthly charges will be calculated at a rate of Rs5.7 per unit.

Distribution companies complain commercial users enjoying subsidy meant for domestic consumers

The regulator is also looking to withdraw the time-of-use facility available to all offices and telecom towers. These will now be charged at a rate that is cheaper than peak-time tariff but higher than off-peak rates. It has been argued that the facility was introduced to give incentives to consumers to conserve energy at peak hours. But telecom operators did not save any energy as their installations remained operative round the clock.

Similarly, most offices are closed at peak hours and hence not entitled to cheaper rates during office timings.

Misuse of subsidy

This would exclude nearly 70 per cent of consumers who are currently classified as ‘lifeline’ by distribution companies.

Distribution companies had asked the regulator to discontinue the lifeline facility as they claimed it was being misused because of outdated definitions. They argued that the most subsidised consumers ought to be those who live below the poverty line and use nothing more than a fan and a couple of lights. Consumers who had an installed and sanctioned load of more than 1 kilowatt could not be treated as ‘poor’, they maintain.

The regulator has also decided to change the terms and conditions for domestic consumers to exclude all educational institutions, madressahs, mosques and government offices from receiving subsidised power rates, originally meant for domestic consumers. These consumers will now be classified as a special category and treated like commercial users.

Currently, all educational institutions, government offices, mosques, madressahs and other places of worship are classified as ‘domestic consumers’. Around 200,000 consumers who are technically not ‘residential’ users, fall into this category and enjoy the low slab benefits available to domestic consumers.

Distribution companies have been lobbying for the exclusion of such customers from the lifeline category for quite some time. Observers feel that successive governments have shied away from a decision on the matter due to political reasons and a possible backlash from religious groups.

An official told Dawn the Pakistan People’s Party government had decided to exclude such consumers from the domestic category for both power and gas supply, but had to withdraw the decision before a formal notification.

Published in Dawn, July 10th, 2014