ISLAMABAD, Jan 14: The National Electric Power Regulatory Authority (Nepra) has increased electricity tariff for lifeline consumers through minimum charges and has allowed Wapda’s distribution companies to have automatic fuel adjustment on a quarterly basis to pass on the impact of fuel price to consumers.

Nepra took the decision on a review motion of distribution companies of the Water and Power Development Authority through a majority (3-1) vote, with one Nepra member submitting a dissenting note. The tariff increase for lifeline consumers (who use less than 50 units (kwh) per month) has been allowed because of the imposition of a mandatory minimum charge even though the consumer may not use 50 units.

The revised rate would not affect the lifeline consumers in the current circumstances because the government is picking up the additional amount as subsidy but this additional cost has to be recovered from other categories of consumers. However, the consumer would have to pay a fixed price for 50 units.

In his dissenting note, Nepra member Abdul Rahim Khan opposed the minimum charges on the ground that it was already part of the operation and maintenance cost of the power companies’ tariff. “There is no justification for any increase in minimum charges for residential and commercial consumers or introducing new industrial classes which were not paying these charges before March 2007,” which would give undue advantage to the distribution companies at the cost of the consumer.He said the increase in the minimum charges was particularly unfair in case of lifeline consumers who are declared to be protected from any reduction of cross subsidisation under the existing rules. “The protection afforded to such consumers as a poverty alleviation measure should not be diluted by increase in minimum charges.” For example, he said, the lifeline consumer who consumed 20 units in a month was made to pay Rs3.50 per unit instead of the intended rate of Rs1.40. “In this manner a lifeline consumer is charged more than a normal consumer consuming 100 units a month at Rs2.70 per unit.”

Mr Rahim also criticised the imposition of time of use metering on the commercial and industrial consumers that entailed higher electricity rates at peak hours but if they don’t use that electricity they still have to pay for the allocated capacity. He said in case where a fixed charge was applied on the basis of maximum demand recorded in peak as well as off-peak hours, the incentive for usage during off-peak was diluted by recovery of fixed charge for capacity addition not caused by such use.

As a result, a two-shift industry which is inoperative during peak hours and should not be charged any fixed capacity charges is penalised. “Such iniquitous treatment becomes evident in the case of forced loadshedding when imposed in case of power shortages such as presently being applied to the manufacturing industry (being denied power during peak hours).

Nepra has also allowed adjustment of fuel price impact in the consumer tariff on a quarterly basis, instead of current practice of six-monthly review. Currently, only the Karachi Electric Supply Company is allowed to have the impact of quarterly fuel adjustment because of its privatisation.