DNA
LAHORE: As the power tariff, once again, has been raised further for all categories, including the trade and industry, the Ferozepur Road Industrial Association (FRIA) has urged the National Electric Power Regulatory Authority (NEPRA) to withdraw the jump in power charges, since it has approved an additional across-the-board charge of Rs1.15 per unit for electricity consumers of industry throughout the country.
In a statement issued here, the FRIA senior vice chairman Shahbaz Aslam said the government’s decision to increase the electricity tariff is anti-industry, and the FRIA strongly condemns the government’s move and calls on it to rescind it. He urged the power ministry to identify system constraints and communicate targets to all concerned departments in order to launch a wartime effort to upgrade the transmission system.
Shahbaz Aslam said that it is unfortunate that the National Electric Power Regulatory Authority (NEPRA) has accorded final approval for massive raise in electricity rates for industry, commercial sector, agriculture tube-wells, AJK, public lighting and other categories of consumers.
The FRIA SVC said that the further increase in rate of electricity is also part of pact signed between government and International Monetary Fund (IMF), which says that the government has to notify NEPRA’s determinations without any delay and amendment.
On July 14, 2023, the NEPRA approved average rebasing in tariff of Rs4.96 per unit across the board but the government, after intensive consultation, decided to pass more financial impact of proposed increase to unprotected domestic consumers and other categories through cross subsidisation to protected category of domestic consumers and adjustment of Rs148 billion subsidy. He argued that this is a big blow to electricity-heavy industries, if not passed on to the consumers. It could also affect the businesses, who are reliant on grid. Roughly this could mean over Rs50/bag impact if their goods are produced using grid. He said that Pakistan’s industry had been harmed by the high cost of doing business, which discouraged investment in capacity and capability and called for easing the burden of heavy taxes on the power sector. He said that the high cost of doing business has proved to be dangerous for Pakistan’s industry, discouraging investment both in capacity and capability, calling for lessening the burden of heavy taxes on the power sector.
It is to be noted that the Authority conducted the hearing in the matter on November 29, 2023, wherein the data submitted by the CPPA-G came under scrutiny. According to reports, the Nepra reviewed the request by CPPA-G seeking monthly FCA and due diligence was done accordingly. From perusal of the information so provided by CPPA-G, the actual pool fuel cost for the month of October 2023, as claimed by CPPA-G, is Rs.11.4277/kWh, against the reference fuel cost component of Rs.7.8938/kWh. The actual fuel charges, as claimed by CPPA-G, for the month of October 2023 increased by Rs.3.5339/kWh as compared to the reference fuel charges.
CPPA-G is directed to develop a proper mechanism for Inter DISCO settlement of FCA worked for each XWDISCOs and the FCA charged from consumers after consultation with DISCOS, in order to ensure proper accounting of energy and cost of each DISCO as per their own basket.
The Nepra, after incorporating the adjustments, has reviewed and assessed a National Average Uniform increase of Rs.3.0786/kWh in the applicable tariff for Discos on account of variations in the fuel charges for the month of October 2023 i.e. Actual National Average Uniform Fuel Charge Component for October 2023 for Discos consumers was Rs 10.9724 per unit against corresponding FCA of Rs 7.9838 / kWh, showing a difference of Rs 3.0786/ kWh.
The regulator had already held public hearings on the subject twice and agreed to the application of these charges but had withheld formal notification because of lapses in the language of the decisions taken by the Economic Coordination Committee (ECC) of the Cabinet and ratified by the cabinet.
Nepra had pointed out that the cabinet approved the uniform application of QTAs to K-Electric along with other Discos for the future but two previous quarters — October 1 to March 31 — were not covered emphatically.
