ISLAMABAD: Before leaving office, the PMLN-led coalition government on Monday approved the merger of quarterly tariff increases for K-Electric with other distribution companies (Discos) seeking more than Rs4 per unit additional cost worth Rs145 billion for recovery in July-September billing, besides clearing amendments to the power transmission policy for speedy investments from Gulf Cooperation Council (GCC) through negotiations on government-to-government (G2G).

The decisions were taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet presided over by Finance Minister Ishaq Dar.

The ex-Wapda distribution companies (Discos) have already filed a request before the power regulator for charging an additional amount of Rs145bn from their consumers under quarterly tariff adjustment (QTA) for the period April-June through upcoming billing months. On the request of the Power Division, the ECC approved policy directions to the National Electric Power Regulatory Authority (Nepra) to not only apply the same request for application on the KE consumers for uniformity but it should also apply to past outstanding QTAs for KE. Nepra has already fixed Disco’s request for a hearing on Aug 23.

The Power Division had last month sought implementation of Nepra’s previous determinations envisaging up to Rs4.45 per unit quarterly adjustment for the first quarter of 2022-23 (July to September) and Rs1.55 per unit for the 2nd quarter of 2021-22 (October to December) to the consumers of KE. However, the Nepra had not allowed these increases on technical grounds and noted that these increases could only be allowed with clear policy guidelines of the federal government.

The ECC approved tariff rationalisation for K-Electric by way of adjustments that shall be applicable on the consumption of April, May, and June to be recovered from consumers in three months (July, August, and September), respectively“, an announcement said.

The ECC also approved policy guidelines under which “Nepra shall determine the application of QTAs of ex-DISCOs on KE consumers…with same application period, keeping in view financial viability of the sector and uniform tariff policy of the federal government”.

Transmission policy

On the instructions of the Special Investment Facilitation Council (SIFC) – a supra body of civil and military leadership, the ECC also approved “the summary of Ministry of Energy regarding proposed amendments in Transmission Line Policy 2015 (the TL Policy 2015) for inclusion of ancillary services projects in its scope”.

The meeting was told that SIFC had directed the Power Division to process 10 projects in the power sector for investments from GCC countries including the upcoming visit of the Saudi delegation.

The list of projects pertained to the transmission sector including new transmission lines, augmentation of existing infrastructure like extension of line bays at substations, grid stations and the ancillary services required for the system stability and reliability.

Home remittance

On the demand of SBP, the ECC doubled the performance-based incentive for banks etc from 50 paise to Re1 per incremental dollar growth up to 5pc, Rs2 per incremental dollar for growth exceeding 5pc and up to 10pc over previous years and so on. Under Sohni Dharti scheme, a new category of diamond category has been allowed for remitters of more than $50,000 for redeeming points from the existing three categories of green, gold and platinum for remittances between $10,000 and $30,000.

The ECC also considered a summary of Ministry of Energy (Power Division) regarding a contract with Tavanir of Iran for the purchase of 104MW electricity and approved the amendments in the contract with Tavanir related to extension of tariff for existing supply of 104MW (Jackigur-Mand) from Jan 1, 2022 to Dec 31 2024.

The meeting also approved two supplementary grants worth Rs3.5bn including Rs3bn to the Ministry of Information & Broadcasting for the Prime Minister’s Health Insurance Scheme for Media Workers, Journalists and Artists and Rs500 million to the Ministry of Defence for security-related requirements of the Joint Staff Headquarters (JSHQ) during 2023-24.

Published in Dawn, August 8th, 2023