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Nepra announces tariff relief

06 January, 2014

ISLAMABAD: Apparently for the first time in almost 15 years, the National Electric Power Regulatory Authority (Nepra) has started decreasing tariff following an intervention by the Supreme Court.

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ISLAMABAD: Apparently for the first time in almost 15 years, the National Electric Power Regulatory Authority (Nepra) has started decreasing tariff following an intervention by the Supreme Court.

On Friday, it announced a Rs10 billion cut in the revenue requirement of the Lahore Electric Supply Company (Lesco) for 2013-14 by reducing tariff by up to Rs1.51 per unit for the lowest slabs of domestic consumers.

As part of suo motu proceedings on electricity rates, the court had been critical of the role played by Nepra for obliging every request of the government and power companies to increase tariff instead of asserting its regulatory function in a transparent manner to pass on prudent costs of electricity to consumers.

The public disclosure of the Lesco tariff is the first in a series of determinations the regulator is required to issue for 10 distribution companies of Wapda and the Karachi Electric Supply Company to enable the government to decide how much subsidy it wants to extend to consumers or whether to increase the tariff, pending recovery of more than Rs400 billion from defaulters.

Under the existing mechanism, the minimum determined tariff of any company is applied to consumers of all other companies as well to ensure uniform rates throughout the country.

Under the determination released on Friday, Nepra kept tariff for consumers using less than 50 units at the existing Rs4 per unit.

The tariff for 1-100 units per month has been reduced by 9 paisa and that for 101-300 units by Rs1.51 per unit.

The rate for consumers who use more than 300 and up to 700 units will be reduced by Rs1 per unit, while that for more than 700 units has been kept unchanged.

The tariff for commercial, industrial, agricultural and bulk supply has been cut by Rs50 per unit.

The Lesco is estimated to sell about 14.83 billion units to consumers during the current financial year with a revenue requirement of more than Rs200bn.

Nepra officials said the regulator had completed the process of public hearings and internal analysis of the revenue requirements of all the distribution companies and was finalising determinations for other companies. They said the tariff determinations for other companies would be made public within 10 days to enable the government to notify lowest determined tariff for any company for application across the country.

An official of the ministry of water and power said the final decision about the tariff notification would be made by the finance ministry, depending on the overall subsidy allocation.

He said that if the finance ministry decided to maintain the existing level of subsidy, the consumers would not get the benefit of tariff reduction worked out by Nepra.

End.


 
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