ISLAMABAD-Karachiites are going to face another massive hike of approximately Rs11.18 per unit in power tariff, as National Electric Power Regulator Authority(Nepra) has reserved the judgment on a motion for rate increase, on account of three quarterly adjustments of FY2022-23.
In a public hearing, while expressing concern over the tariff increase, Chairman Nepra has said that it is not the regulator which raises the electricity rates, rather it is the federal government that hikes it.
The Nepra conducted a public hearing regarding the federal government motion seeking the regulator’s approval for determination of uniform consumer-end tariff for K-Electric and requested to pass on the burden of three quarterly adjustments to the KE’s consumers having a total impact of Rs10.32/unit. However, with the application taxes the hike will go up to Rs 11.18/unit, informed the official.
The adjustments are for 2nd quarter, 3rd quarter and 4th quarter of the fiscal year 2022-23. For the 2nd quarter, the increase will be Re 0.4689/unit, for the 3rd quarter up to Rs4.4547/unit and for the 4th quarter the hike of Rs 5.40/unit has been requested. During hearing, it was informed that as many as 40 percent of total consumers were protected through low tariff rates whereas 63 percent of total residential consumers fall in protected categories of the consumers.
Power Division officials said that these protected consumers had been paying electricity bills ranging between Rs3000 to Rs7000 per month. The Nepra’s official, however showed doubt over the authenticity of the data. There seemed to be serious issues in Discos that might be charging bills by imposing higher slabs, Nepra official said. Similarly, the regulator said that figure of 60 percent protected consumers submitted by Power Division seemed to be wrong too. The official raised serious questions over the tariff policy approved by the government. The tariff policy ignored the issues of tax collection, and economic growth as the higher tariff affected these two segments, he added. These tariff hike had also affected industrialisation that would also affect the employment, Nepra official said and questioned that if people are not employed, how they will pay their bills?.
Power Division was asked to convey the regulator’s serious concerns over tariff policy that was affecting everyone in the country. Chairman Nepra Waseem Mukhtar said that Power Division is representing the federal government. “We are concerned about policy framework and tariff shocks,” Chairman Nepra said. He further grilled the Power Division officials over holding Nepra responsible for increase in tariff. Nepra decides tariff in response of motions submitted by the government, Waseem Mukhtar said and added that the federal government hikes tariff.
Nepra officials added that economy had slowed down and the government should assess the impact of high electricity rates on the economy and the common man. Power Division officials said that there are certain factors which are not in control of the government. They said that global factors had impacted the power sector and we have to go through challenging times. We are studying multiple options and are sensitive about industry implications,” Power Division officials said, adding that government is trying to control the economic crisis. It had taken several initiatives to control hikes in dollar rate and power theft.
Meanwhile, CFO of K-Electric said that as many as 1.2 million out of total 2.8 million residential consumers had paid bills below Rs 3000 per month. KE’s 1.6 million consumers were paying bills over Rs 3000, he said and added that as many as 60 percent consumers out of total 518000 paid bills below Rs 6000. Chairman Nepra directed the Power Division to conduct analysis with Nepra technical team to verify the figures.
An invervenor representing steel industry said recent increase in tariff did not include upcoming increase in electricity rates on account of fuel adjustment. Around Rs 8 per unit base tariff was increased earlier and the government was seeking another increase in tariff by Rs 10 per unit, he added. The total increase amounts to Rs 18 per unit,” he said, adding that industry cannot bear such huge increase in tariff.
Another intervenor representing Karachi Chamber of Commerce said that they reject increase in tariff as it would shut down the businesses. He demanded forensic audit of KE. Hafiz Naeem ur Rehman representing Jamaat-e-Islami said that management of KE had committed to provide cheaper electricity at time of acquiring but they violated the commitment. They had also pledged to invest 361 million dollars but they did not fulfill their commitment. “The license of KE should be cancelled,” he said, adding that multiple companies should be allowed to operate in Karachi.
He further added that consumers should be allowed to take electricity directly from power plants rather than taking expensive electricity being generated by KE. He also demanded that forensic audit of KE should be conducted. He also alleged that KE employees were mafia and involved in power theft in Karachi. He accused that they were running 30 illegal PMTs in different areas of Karachi. Nepra has reserved the judgment and will announce it later.