ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Friday approved a tariff hike of Rs1.72 per unit for K-Electric consumers as part of the second and third-quarter adjustments for the year 2023.

Nepra endorsed the federal government’s request for a tariff increase to be applied from January to March 2024, which was forwarded to the federal government for official notification.

This steep rise in power tariff is expected to impact the cost of doing business in the ecnomic nerve centre of the country.

The power sector regulator states that the increase aims to address the backlog related to quarterly tariff adjustments and to implement a uniform tariff policy and regulatory regime across the country.

A public hearing on the requested tariff hike was held on Dec 20, but the decision was reserved.

However, Nepra on Friday announced its decision and ordered the federal government issue a formal notification to this effect.

According to the decision, Nepra authorised a Rs1.25 per unit increase in the second quarterly adjustment for electricity consumption from July to Sept 2023, along with a 47 paise per unit increase in the quarterly adjustment for electricity consumption between April and June 2023.

As per Nepra’s decision, both of these quarterly tariff adjustments will be recovered from consumers (excluding lifeline consumers) over three months, starting Jan 2024, following notification from the federal government.

During the hearing, representatives from the power division stated that the additional cost had already been collected from all other Disco customers, but it was due to be collected from K-electric customers.

Business community representatives at the hearing asserted that Karachi city’s enterprises are suffering due to the ongoing increase in electricity costs. They mentioned that tariff rises occur due to fuel adjustments and, at other times, due to a uniform rate across the country. They rejected any further tariff increases, emphasising that the rising cost of electricity would lead to future increases in the prices of manufactured goods.

The federal government had already approved the raise in accordance with the National Electricity Policy 2021 to maintain a standard consumer-end tariff for KE and state-owned distribution businesses, according to the notification.

Earlier this month, Nepra notified consumers of ex-Wapda distribution companies of an additional fuel cost adjustment of Rs3.08/unit, with a net financial impact of about Rs28.5 billion for power consumed in October.

According to Nepra’s announcement, the adjustment will apply to all consumer categories except electric vehicle charging stations and lifeline customers and will be individually included in the December bill.

Published in Dawn, December 30th, 2023