Flat tariff for industry extended till June next year

Published June 18, 2021
Industrial consumers would be provided electricity at flat Rs12.96 per unit.  Reuters/File
Industrial consumers would be provided electricity at flat Rs12.96 per unit. Reuters/File

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday approved extension of flat electricity tariff to industrial consumers across the country without the application of expensive peak-charges till June 30, 2022.

The approval came following a decision of the Cabinet Committee of the Cabinet and ratified by the Federal Cabinet on the ground that industrial support package had contributed significantly to growth in industrial output and resultantly the economic growth rate.

“The authority has no objection in approving the instant proposal regarding extension of peak tariff for industrial consumer till June 30, 2022, both for the consumers of ex-Discos and K-Electric,” said the regulator in its determination saying the extension did not have any impact on Nepra determined tariff, since the federal government will bridge the gap through provision of additional subsidy.

Therefore, even during peak hours, “the off-peak rate along with applicable quarterly adjustments would be charged and the difference in this regard would be picked up by the GoP as subsidy, is approved till June 30, 2022”. The package means the industrial consumers would be provided electricity at flat Rs12.96 per unit.

Cabinet has already approved Rs26bn subsidy for this extension

However, the regulator rejected a request of the Ministry of Energy and KE for automatic incorporation of extension in industrial package in the then prevailing tariff structure of Discos and KE for future interactions. It said “before giving any such approvals, complete justification of the proposal along with input from all the stakeholders needs to be taken into account, therefore, request of MoE and K-Electric for automatic extension of Industrial Support Package is not accepted.

The CCoE had abolished on Nov 2 last year the Time of Use (TOU) tariff scheme for industrial consumers. Under this, the peak and off-peak tariff structure was abolished only till April 30, 2021 and a review was to be carried out by March 31, 2021 for its continuation or otherwise beyond April 2021.

The Power Division subsequently reported in April that on average 21pc consumption growth had been observed during the November-February period, with a peak of 28pc higher consumption in February alone, with major consumption in B3 and B4 categories, and involved a total subsidy of Rs7.75bn. The extension of the scheme till June 30, 2022 would involve Rs26bn subsidy, already approved by the federal government and earmarked for next fiscal year.

The CCoE on April 15 announced its approval “for the Extension TOU Tariff Scheme for industrial consumers from May 1, 2021 to June 30, 2022”. The package was originally approved in November 2020 and was set to expire on April 30, 2021.

Published in Dawn, June 18th, 2021

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