ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has increased the incremental electricity tariff for industrial consumers from Rs22.98 to Rs25.30 per unit, despite strong opposition from two of its members, while also allowing power distribution companies to recover an additional Rs2.37 per unit from consumers in November bills.
Thank you for reading this post, don't forget to subscribe!The decision revises the Incremental Support Package (ISP), introduced in December last year to encourage additional industrial electricity consumption and revive industrial activity. However, industrialists have been opposing the package since May, arguing that it has failed to provide the intended relief and has instead increased their electricity costs.
The revised rate was approved through a 2-2 split within the regulatory authority, with NEPRA Chairman Waseem Mukhtar exercising his casting vote in favour of the increase.
In a joint dissenting note, Member Tariff Amina Ahmed and Member Development Maqsood Anwar questioned the basis of the revised rate, describing Rs25.30 per unit as an unsupported figure. According to their assessment, NEPRA’s institutional calculations placed the actual marginal cost of incremental electricity at Rs31.83 per unit.
The dissenting members argued that the revised rate lacked a credible link with the actual cost of supplying additional electricity. They recommended temporarily suspending the package until authentic cost data and revised calculations were provided by the relevant government entities.
They also warned that continuing the package at a rate below the actual marginal cost could shift additional financial burdens onto other electricity consumers through the Fuel Cost Adjustment (FCA) and quarterly tariff adjustment mechanisms.
NEPRA Chairman Waseem Mukhtar acknowledged that the dissenting members’ conclusions required serious consideration. However, he maintained that suspending the package at this stage would not be appropriate and that the Ministry of Energy should be given another opportunity to submit the required information.
The regulator’s four members unanimously criticised the Power Division and its subordinate organisations for failing to provide the necessary revised calculations despite repeated reminders. The Independent System and Market Operator (ISMO) and Power Planning and Monitoring Company (PPMC) were also criticised for not providing the required marginal price data.
NEPRA has set deadlines for the relevant entities to submit the outstanding information and warned that failure to comply could result in the suspension or termination of the industrial support package. It also cautioned that legal proceedings could be initiated against entities that fail to fulfil their obligations within the prescribed timelines.
Separately, NEPRA approved an additional charge of Rs2.37 per unit under the monthly FCA mechanism for November electricity bills. The adjustment will allow distribution companies to recover approximately Rs25 billion from consumers across the country, including customers of K-Electric.
The latest decisions have raised concerns over industrial electricity costs and the potential transfer of power-sector financial burdens to consumers, at a time when the government is seeking to stimulate industrial growth and improve economic competitiveness.
Story by Khaleeq Kiani
