ISLAMABAD: The government on Monday notified an increase in electricity rates by Rs1.09 to Rs2.89 per unit for various consumers of Karachi to bring it on a par with the rest of the country, with retrospective effect from September 1.

The National Electric Power Regulatory Authority (Nepra) had determined the tariff increase in December 2019 but the government has been holding back its implementation due to political compulsions despite repeated clearances given by the Economic Coordination Committee (ECC) of the cabinet.

Nepra had determined an increase in the power tariff for KE consumers by Rs4.87 per unit, or 44pc, on account of previous years’ adjustments with a total revenue impact of Rs106 billion.

“In pursuance of sub-section (7) of section 31 of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997, the Federal Government is pleased to notify as under the adjustment in the approved tariff on account of quarterly adjustments w.e.f September 1, 2020 as determined and recommended by Nepra vide decision dated December 31, 2019 in respect of K-Electric Limited,” the power division said in a notification.

The rise in the KE tariff is applicable from Sept 1

“Recommended quarterly adjustment to the tune of Rs4.87 being the differential between the schedule of tariff recommended by Nepra for April-June 2019 and the schedule of tariff earlier recommended by Nepra and reflected in KE notified tariff be notified for each category of consumer to the extent of bringing K-Electric consumer-end tariff at par with what is currently in field for consumer of XDISCOs increase in rate of Rs1.09 to Rs2.89/kWh for various categories of consumers,” it added.

The difference after increase will be covered through a Rs26bn subsidy.

The notification also asked the KE to file its revised claim for such quarterly adjustments.

The ECC had earlier approved rationalisation of 11 quarterly adjustments of KE from July 2016 to March 2019. Based on Nepra determination, the ECC had approved in March this year an average Rs2.39 per unit increase in KE tariff to bring it on a par with uniform national power tariff.

This tariff has been pending for almost three years (11 quarters from July 2016 to March 2019). In summers, this works out at about Rs3bn per month, which drops to about Rs2bn or averages out at about Rs2.5bn.

Its application was stopped due to the Covid-19 situation at the time. The ECC again gave a go-ahead for its implementation with effect from July 1, 2020, but it was again withheld by the federal cabinet and Prime Minister Imran Khan on the desire of Pakistan Tehreek-i-Insaf members of the cabinet from Karachi amid floods and loadshedding.

However, as the problems continued, the KE was assured during a recent meeting at the Sindh Governor House of an immediate increase in its consumer-end tariff.

The non-payment of subsidy by the government and the freeze on tariff are creating cash flow problems not only for the KE but also for other power companies because of non-payment of dues against power purchased from the national grid, resulting in a second-tier tariff increase to finance the borrowing costs.

The KE tariff at present is Rs2.89 per unit (kWh) lower than the rest of the country for almost all commercial categories, temporary residential, all bulk supply tariff, public lighting, residential colonies attached to industrial premises and all industrial tariff categories.

The KE tariff for all residential consumers is Rs1.65 per unit lower than the rest of the country.

The KE tariff for commercial consumers on less than 5kwatt load is Rs1.09 per unit lower than the rest of the country.

Published in Dawn, October 13th, 2020