Karachi residents are bracing for a surge in their electricity bills, with a substantial additional charge of Rs1.72 set to be implemented as part of the quarterly tariff adjustment. This adjustment, authorized by the National Electric Power Regulatory Authority (Nepra), seeks to generate revenue for distribution companies, amounting to a significant Rs22.3 billion. However, essential consumers will be exempted from these escalated rates.
The recent Nepra decision greenlights a comprehensive rise of Rs1.15 per unit for all electricity users across Pakistan, encompassing K-Electric consumers. In tandem, Nepra has finalized an extra charge of Rs1.72 per unit exclusively for K-Electric users over the forthcoming three months, spanning from January to March 2024.
This cumulative increase translates to a staggering Rs2.87 per unit surge for K-Electric consumers over the next quarter, pending formal notification from Nepra. The primary objective behind this adjustment is twofold: first, to address the backlog associated with quarterly tariff adjustments, and second, to establish a uniform regulatory structure nationwide, unswayed by varying levels of efficiency and losses among diverse power supply entities.
Nepra’s determination outlines the recovery of a substantial Rs22.297 billion from consumers of ex-Wapda distribution companies (XWDISCOs) within the January-March 2024 period. This recovery encompasses diverse factors such as capacity charges, variable operations and management expenses, incremental sales’ additional recovery, system charges, market operator fees, and the implications of fuel cost adjustments on transmission and dispatch losses during the July-September quarter of the fiscal year 2023-24.
The tariff schedule set by Nepra incorporates the imposition of Rs1.15 per unit on all consumer categories, excluding lifeline consumers utilizing less than 50 and 51-100 units monthly. This aims to accumulate Rs22.297 billion over three months. Interestingly, distribution companies initially demanded Rs23.055 billion for the same period at a rate of Rs1.25 per unit.
Nepra’s directive extends these quarterly adjustments to K-Electric consumers, in alignment with federal government guidelines, ensuring parallel application to both K-Electric and XWDISCOs consumers for tariff standardization.
In adherence to policy directives, Nepra conducted a public hearing to approve an additional Rs1.72 per unit charge for K-Electric consumers, encompassing two QTAs for the fiscal year 2022-23, as per the power division’s request.
Despite previous agreements on these charges, Nepra had delayed formal notification due to discrepancies in decisions made by the Economic Coordination Committee (ECC) of the Cabinet, ratified subsequently. Rectifications were undertaken by the federal cabinet on November 10 to address these legal discrepancies highlighted in earlier public hearings.