ISLAMABAD, June 28: The National Electric Power Regulatory Authority (Nepra) has reduced the power tariff for all consumers except small residential consumers of Islamabad and Gujranwala distribution companies.

No tariff reduction has been allowed to domestic consumers in these two areas using less than 300 units per month on the ground that they were already enjoying a subsidy.

The new tariff determinations have been sent to the ministry of water and power and would become effective from the date of notification by the federal government in the official gazette.

Under the Nepra determination in respect of Islamabad Electric Supply Company (Iesco), the tariff for domestic consumers using above 300 units per month has been reduced by 14 paisa per unit (Kwh).

The commercial tariff for Iesco has been reduced by Rs2.41 per unit while industrial and agricultural tariff has been brought down by 72 paisa and 79 paisa per unit respectively.

Similarly, the residential tariff for Gujranwala Electric Power Company (Gepco) has been decreased by three paisa per unit. Its commercial tariff has been cut by Rs1.04 per unit. Gepco's industrial and agricultural tariff has been brought down by 79 paisa and 52 paisa per unit respectively.

The revised tariffs of the remaining five distribution companies of Wapda would follow in the next few days. This tariff determination for the eight distribution companies will be the final step in the completion of the restructuring process of Wapda initiated in 1992.

A Nepra announcement said the revised lower rates allowed to Iesco and Gepco will be particularly helpful in stimulating commercial activity and reducing input cost of manufacturing and agriculture, thus helping the economy in becoming more competitive within the forthcoming WTO regime.

Consequent to the restructuring and unbundling of Wapda power wing and incorporation of independent, transmission and distribution companies, the tariff to be charged by the generation companies and transmission companies has already been determined by the Nepra.

Iesco and Gepco had requested to allow a distribution margin and pass through of power purchase costs in the shape of a multi-year tariff for the next five years, which is sufficient to maintain their financial health and can provide reliable service to the consumers.

While determining the tariff, Nepra said it has considered the prudent costs of the companies required to provide reliable service at the most economic rates. Incentives have been provided to reduce costs particularly through loss reduction programme that would become part of the companies' profit.

Nepra found that since there was a large percentage of industrial and commercial consumers in the service territory of the two companies the present rates result in a revenue accrual which is more than the prudent costs.