Govt moves to recover fixed costs without raising subsidy outlay; hearing set for Feb 10
Nepra officials warned Gepco over the illegal installation of Advanced Metering Infrastructure (AMI) on small meters. They said that the company was installing AMI without approval of the regulator and even without data backup. Photo: file
ISLAMABAD:
The power regulator is set to allow amendments in the tariff structure for power distribution companies, including K-Electric (KE), as part of a federal government proposal to rationalise electricity tariffs without increasing the overall subsidy burden.
Pakistan’s power regulator will hold a public hearing next week on the proposal, which seeks to revise fixed charges and rebalance variable rates across state-run distribution companies and KE, a move that could reshape electricity bills.
The National Electric Power Regulatory Authority (NEPRA) said the hearing will take place on February 10 to consider the government’s motion and policy guidelines aimed at introducing a uniform tariff structure for ex-WAPDA distribution companies and KE under the provisions of the NEPRA Act and applicable tariff rules.
According to the motion, the government has asked NEPRA to revise the applicable uniform tariff while remaining within the already approved consolidated revenue requirement of the power sector and the budgeted tariff differential subsidy of Rs249 billion.
The proposal seeks to better reflect the underlying cost structure of the power sector, particularly the recovery of fixed costs, which have increasingly weighed on the finances of power distribution companies.
The cabinet has already approved the uniform tariff framework and the government has submitted it to NEPRA for formal incorporation into the regulator’s schedule of tariffs.
Under the proposed framework, the plan includes the introduction of revised fixed charges and a rebalancing of variable per-unit rates in line with revenue requirements already determined for distribution companies.
For KE, the government has requested NEPRA to reconsider and issue a modified uniform tariff to maintain parity across the country while ensuring the utility recovers its approved revenue requirement.
The proposal also allows for targeted subsidies or cross-subsidies to be notified through amendments in existing statutory regulatory orders.
If approved, the proposed changes would not alter the overall subsidy envelope but could redistribute costs among different consumer categories, potentially increasing fixed charges while adjusting per-unit electricity rates.
NEPRA said the public hearing will be held both online and at its Islamabad headquarters, allowing consumers to submit written comments or present their views during the proceedings.
