The National Electric Power Regulatory Authority (NEPRA) has approved an electricity rate increase for consumers of K-Electric for the months of October and November.
The rate hike aims to reduce the federal government’s subsidy payments to the Karachi-based utility. However, another increase of 47 paise per unit has been withheld due to legal considerations.
This increase comes on top of a previously approved rate hike of Rs3.28 per unit for K-Electric consumers, which is part of a uniform national tariff hike that will be applied across the country for six months, from October 2023 to March 2024.
As a result, K-Electric consumers will experience an additional cost ranging from Rs4.76 to Rs7.73 per unit, depending on their consumption slabs and categories, during October and November. From December to March, an average increase of Rs3.28 per unit will be applied.
The rate increase was approved at the request of the federal government. Nepra’s determination specifies that it “has decided to allow the application of the 1st quarterly adjustment of FY2022-23, ranging from Rs1.4874 to Rs4.4547 per kWh for different consumer categories, except lifeline consumers, based on the consumption of February 2023 and March 2023, to be recovered from K-Electric consumers in the months of October and November 2023, respectively.”
However, Nepra did not approve the additional 47 paise per unit increase for the second and third quarters of the last year because the policy guidelines approved by the federal cabinet did not explicitly cover those quarters. This decision was made despite Nepra having shared a draft policy guideline with the power division that should have been approved by the federal cabinet. These charges have already been collected from consumers of other power distribution companies.
Nepra’s determination further states, “Regarding quarterly adjustments for FY2022-23, i.e., Rs0.4689 per kWh, the Authority will process the same or any other pending adjustments (3rd quarter of FY2022-23) once the policy guidelines clearly stipulate such quarters, which are pending recovery from K-Electric consumers, prior to the formulation of policy guidelines.”
Under the approved rates, K-Electric’s domestic consumers in the residential category, consuming between 100 and 300 units per month, will face an additional charge of Rs1.49 per unit on top of the Rs3.28 per unit increase that will remain in effect until March 2024. Residential consumers using 301 to 700 units and above will experience an additional burden of Rs3.21 per unit for the next two months, in addition to the six-month charge of Rs3.28 per unit. All other consumer categories will see an additional cost of Rs4.46 per unit on top of the six-month charge of Rs3.28 per unit.
The power division had requested three separate sets of quarterly adjustments for K-Electric to align with consumers of ex-Wapda distribution companies, aiming for uniformity. These adjustments include applying 47 paise, Rs1.49 to Rs4.45, and Rs3.55 per unit in additional charges.
