ISLAMABAD: The National Electricity Regulatory Authority (Nepra) has agreed in principle to allow the federal government to impose a surcharge of up to Rs 1.25 per unit on domestic consumers using more than 700 units and to d ‘other categories of commercial and industrial consumers aimed at cross-subsidizing other domestic consumers as a “special arrangement in special circumstances”.

This agreement was concluded between the federal government and Nepra so that an amount of Rs 700 million can be increased through quarterly tariff adjustments.

The federal government recently issued an ordinance, seeking the power to impose surcharges on electricity consumers in accordance with the agreement with the International Monetary Fund (IMF) and the World Bank.

On Monday, when the hearing began on the federal government’s reconsideration request, Nepra Chief Tauseef. H. Farooqi said that during its recent meeting with the IMF, the Fund team made it clear that the regulator had no power to hear such a request from the federal government. But when he started to agree with CAPP-G’s point of view, an unpleasant situation was observed in the courtroom.

President Nepra and Sindh member Rafique Ahmad Shaikh were seen to disagree on the prospects for the applicability of the force majeure clause by PPIs, if the regulator accepts the government’s request due to the Covid-19 situation .

The Nepra had determined quarterly adjustments of Rs 1.72 per unit for the fourth quarter of fiscal year 2019-2020 and the first and second quarters of fiscal year 2020-21 for all categories of consumers except lifeline consumers. Currently the applicable quarterly adjustment is Rs 1.65 per unit for domestic consumers, however, for temporary supply the rate is Rs 2.89 per unit and for peak demand of less than 5 kW is from Rs 1.09 per unit.

Power Division, in its tariff review request, stated that with regard to the provisions of the law, as amended by the Ordinance of 2021 on the Regulation of Electricity Generation, Transmission and Distribution ( modification), periodic quarterly adjustments must be made by the Authority. , among other things, in accordance with the political orientations of the federal government. In addition, in accordance with the recently added provision of Section 31 (8) of the NEPRA Act, the federal government has been empowered to impose surcharges for the purposes specified therein. The opposing observations made in the determinations regarding the power of the federal government to impose surcharges must therefore be reconsidered.

The request for reconsideration further states that the federal government, taking into account the socio-economic conditions of the country as well as the policies in force, has decided to adopt the previous tariff rationalization method and, accordingly, a surcharge is to be levied on the categories of consumer (s) specified therein, for the purposes of fulfilling the federal government’s financial obligations with regard to electricity services, which must be within the revenue requirements determined by the Authority.

During the hearing, Acting CEO CPPA-G Waseem Mukhtar said the government wanted to replace the existing quarterly adjustment of Rs 1.72 per unit collected from consumers with Rs 1.65 per unit as of September 2021, to be charged on the October 2021 invoices, the financial impact of which will remain the same for domestic consumers using less than 700 units. However, domestic consumers who used more than 700 units in the fourth quarter of fiscal year 2019-2020 and the first and second quarters of fiscal year 2020-21 will have to pay 7 Paisa per unit.

Other categories of consumers, who pay Rs 2.89 per unit for quarterly tariff adjustments, will have to pay Rs 2.97 per unit from October 1, 2021 after a surcharge of Rs 1.25 per unit is imposed. unit – an increase of 8 Paisa per unit but for those consumers whose peak load is less than 5 kW, they will pay an additional 11 Paisa per unit. Concluding the hearing held on the federal government’s request for review, President Nepra clarified that the tariff for domestic consumers who use up to 700 units will remain unchanged from October 1, 2021, while those consumed at during the fourth quarter of fiscal year 2019-2020 and the first and second quarters of fiscal year 2020-21 must pay an additional Paisa 7 per unit. Other categories of consumers who pay Rs 2.89 per unit as a quarterly adjustment will be charged Rs 2.97 per unit from October 1, 2021.

Copyright Business Recorder, 2021