Govt amending rules to contain mass shifting to net-metering

ISLAMABAD   -   The federal government is amending the net-metering regulations, which will enable it to downward revision in power purchase rate from new net-meters, convert existing regime to gross billing (separate rates for import and export of units) and introduce separate tariff for this category.

The Power Division has been tasked by the Prime Minister Office to complete finalization of the amendment in net-metering regulations by May 31, official source told The Nation. Apparently scared by the mass exodus of the consumers from the national grid to net-metering, the federal government is working on various options to control the rise in capacity payments, boost electricity sale and discourage new entrants the into net-metering venture.

The conversion of the existing net-metering regime to gross billing (separate rates for import and export of units), will force the consumers to pay high rates for the purchase of electricity from the national grid.

Currently, the import and export rates of electricity for the net-metering consumers are the same. The Power Purchase Price for the XWDiscos is Rs 22.95 per unit, while the national average of PPP is Rs 22.42 per unit. The government is paying the PPP to net-metering consumers and they are being provided electricity at the same rate. On the other hand, the consumers with no net metering connections are paying up to Rs 43 per unit tariff. Thousands of net-metering consumers across Pakistan are not paying General Sales Tax (GST), monthly Fuel Charges Adjustments, Quarterly Adjustments or any other taxes being charged from the electricity consumers, said the source.

The Power Division would move a summary after fine tuning the various elements of rationalization. The first task is the amendment of net metering regulations, which will enable the government to convert the existing net-metering regime to gross billing (separate rates for import and export of units).  Besides, a separate tariff category will be created for the net-metering consumers. Similarly, for future net-metering consumers, the buyback rates are also being revised, said the source. Inclusion of fixed charges on net-metering is also being considered.  A dynamic formula to determine a reasonable buy back period will also be finalized, said the source. Currently, net-metering consumers are dispatching over 2000 megawatt of electricity into the national grid. It is worth to note here that Pakistanis are leaving the national power grid in bulk as the consumers with net-metering connections have increased by almost 90 per cent with a cumulative capacity of 2000 megawatts during the 10 months of the ongoing fiscal year.

The cumulative capacity of the net metering connections has increased by 90 percent from 1055 MW in June 2023 to around 2000 MW in April 2024, said the source.

During the last nine years, when the National Electric Power Regulatory Authority (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations, 2015, in  September 1, 2015, the cumulative capacity of the net metering had reached 1055 MW, but in just 10 months around 945 MW new net-metering connections have been provided.

The source said that currently around 6000 to 7000 applications for net-metering is pending with various Discos.

Such a huge departure from the national grid, partially or fully, is due to the high electricity tariffs and multiple taxes in the consumers bills, the source maintained. This bulk departure will also result in further increase in capacity payments and hike in the bills of the consumers still attached with the national grid.

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