Staff Report
ISLAMABAD: Power consumers are expected to experience a substantial Rs 5.72 per unit (19.2 percent) increase in electricity base tariff as the National Electric Power Regulatory Authority (NEPRA) has received a federal government request to implement a uniform tariff for Distribution Companies (DISCOs) and K-Electric.
NEPRA has scheduled a public hearing for Monday, July 8, to deliberate on the government’s application. In a public notice, NEPRA invited all stakeholders, interested parties, and the general public to participate in discussions regarding the federal government’s motion on consumer-end tariffs for DISCOs and K-Electric, in accordance with the NEPRA Act, 1997, and NEPRA Tariff Rules, 1998.
“Once considered and approved, this will lead to the determination of a ‘Uniform Final Tariff’ for notification by the federal government, effective from July 1, 2024, superseding the existing tariff,” stated NEPRA.
The federal government has requested NEPRA to reconsider and issue a uniform tariff schedule for DISCOs and to modify K-Electric’s tariff to maintain uniformity nationwide. This aims to recover K-Electric’s revenue requirements as determined by NEPRA, considering proposed targeted subsidies and cross-subsidies.
Sources indicated that if the proposed Rs 5.72 per unit hike is approved, DISCOs and K-Electric will collect approximately Rs 486 billion from electricity consumers, with the base electricity tariff for FY 2024-25 rising from Rs 29.78 to Rs 35.50 per unit.
Following NEPRA’s approval, the federal government will issue a notification to implement the new tariff.
The Power Division stated on Thursday that the new electricity rates will be applicable from July 2024. The new tariff is expected to have minimal impact on most people’s monthly bills as the government will provide a subsidy of Rs 440 billion to minimize bill increases.
According to the Power Division, the power price hike will be less than two percent for 16.8 million consumers, while the average increase for the more affluent 42 percent of consumers will be nine percent. Additionally, electricity rates are expected to decrease as the economy improves, with an average reduction of three percent anticipated by January 2025 compared to June 2024. The fixed charges are necessary to cover 75 percent of the power sector’s fixed costs. The burden on the industrial sector has been reduced by Rs 150 billion to promote domestic industry. The new electricity rates will be officially notified after the NEPRA hearing, according to the Power Division.
