ISLAMABAD - Owing to a past mathematical error, electricity consumers in Karachi will have a different, low power tariff for some time now. The recently hiked tariff will not apply to the consumers of Karachi Electric Supply Company (KESC) till such time new calculations are finalised, it is learnt.
The Karachiites will continue to pay bills on old (low) rates because Nepra is yet to determine power tariff for the KESE. However, they will have to pay more after tariff is finally determined. The government will cut the subsidy further down for them to adjust the imbalance, sources said.
This momentary relief for the 2.2 million KESE consumers has come due to a technical reason, more specifically due to a past mistake made by the National Electric Power Regulatory Authority (Nepra) in determination of tariff for the KESE.
When contacted, sources said that the Sindh High Court (SHC) had issued a stay order over a November 23, 2012 decision of Nepra. Later, the court directed the regulatory authority to issue power price decision in the light of the necessary rules and regulations concerned.
Available official documents of Nepra reveal that the regulator had wrongly determined per unit tariff for the KESC due to an ‘inadvertent error’ in the Schedule of Tariff (SoT). The Nepra had then issued a ‘corrigendum’ to rectify the error in the said SoTs.
As per inadvertent adjustment made in SoT for the period – July 2009 to March 2010 – a tariff of Rs3.33/unit was determined for residential consumers using 1-100units/month, Rs2.93/unit for consumer using 101-300units, and Rs3.19 for consumers using 301-700unit/month. Similarly, Rs2.67/unit was fixed for the agriculture category of power consumers.
Since Nepra is busy in its necessary process of revision of three years’ tariff of the KESC, old power prices of KESC will remain effective till such time the job is done, an official said. “Due to non-issuance of power price notification for KESC by the water and power ministry, the massive hike in the tariff as notified on August 5 will remain suspended of KESE consumers,“ he added.
Presently, the per unit price of power in KESE region is Rs2 for consumers consuming 1-50unit/month, Rs5.79 for 1-100 units, Rs12.33 for 101-300 units and Rs12.33/unit for 301-700 units, while tariff for above 700 units is Rs15.07/unit.
Sources in the water and power ministry also said that impact of Nepra’s error was not passed on to the consumers of KESC in the past as the federal government had paid Rs4.5billion heavy subsidy to the privately owned power utility (KESC).
However, they said, “When Nepra will issue its decision on power prices of KESC, the government will adjust the already paid worthy subsidy with the future subsidy.”
The water and power ministry on Friday issued a notification, announcing a 40-176 percent hike in the tariff of domestic and agri power consumers, to be effective across the country from October 1, for whole of the county, except KESC region. The tariff for commercial consumers had already been hiked in August.
After being snubbed by the apex court for not following rules and regulations in a recently withdrawn power tariff hike announcement, the government got the same decision reviewed and endorsed by the relevant regulatory body.
The general increase in power tariff largely came due to devaluation of rupee, but a more key factor is drastic cut in subsidy to power sector as promised to the International Monetary Fund (IMF) for a hefty loan.
Interestingly, the Nepra finalised its review of tariff without conducting even a single public hearing or taking the stakeholders on board over the matter and approved a debilitating hike in tariff for domestic and agri power consumers, despite the concerns raised by the Supreme Court about the colossal hike in the power tariff.