Businesses decry massive jump in power rates

Published July 21, 2022
A technician from K-Electric fixes new electricity meters at a residential building in Karachi. — AFP/File
A technician from K-Electric fixes new electricity meters at a residential building in Karachi. — AFP/File

ISLAMABAD: As the government plans to increase the average national uniform power rates by almost 50 per cent to about Rs42-45 per unit in certain cases, including taxes and surcharges, the power regulator has expressed its inability to be of any help except to sympathise with consumers.

At a public hearing presided over by National Electric Power Regulatory Authority (Nepra) Chairman Tauseef H. Farooqui, trade and industrial bodies, mostly from Karachi, protested over such a massive price hike, saying it would lead to the closure of businesses, make exports uncompetitive and create job losses.

Mr Farooqui, however, said that while he understood the challenges to various consumer groups, he “can only sympathise” and could not extend any help at this stage.

He said the government was still providing about Rs220 billion subsidy to protect the poor segments but the demands from the business community “is beyond our pay grade” and should be lobbied at political level.

Nepra head at public hearing says ‘he can only sympathise’ at this stage

The Nepra chief said the public hearing was kind of a formality given the fact that the regulator had itself approved Rs7.91 per unit increase in average national tariff “based on ground realities”.

Instead, he warned that while determining the average tariff, the regulator had assumed the exchange rate at Rs200 to the dollar, which has already jumped to Rs225.

The regulator, he said, had expected that based on tariff rebasing, the quarterly and monthly tariff adjustments would turn negative, but all these estimates were then upside down.

Consumers may now have to bear an additional burden of Rs4-5 per unit in the shape of quarterly tariff adjustments and fuel charge adjustments in the coming months as well.

Interestingly, despite repeated questions from consumers and Nepra members about the all-inclusive rate of current and upcoming tariffs, the power division team could not confirm the average power rate after taking into account taxes, quarterly and monthly adjustments and surcharges.

Nepra tariff case officers said the average rate was slightly above Rs40 per unit while Nepra’s Sindh member Rafique Shaikh said his estimates suggested it at about Rs44-45 but lamented the power division officials were not blank on such a key thing.

Nepra was hearing the motion filed by the federal government for consumer-end tariff adjustment for K-Electric and power distribution companies previously managed by Wapda, and notification of a uniform schedule of tariff for power consumers, by incorporating targeted subsidy and inter-distribution companies’ tariff rationalisation.

Published in Dawn, July 21st, 2022

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