Electricity tariffs, tariff structure: KE says legal changes have been made – Markets

KARACHI: In accordance with the relevant laws, rules and regulations of the Government of Pakistan and Nepra, various changes have been made to the electricity tariffs and tariff structure which will come into effect from July and apply to the nationally, including to consumers in KE’s service territory. .

The determination of electricity costs to be recovered from consumers across Pakistan in their bills is within the purview of Nepra and the Government of Pakistan.

These changes include the non-extension of the relief for zero-rated industries as well as the relief of peak-hour electricity consumption for industrial consumers. Retail tax with revised slabs was introduced for commercial consumers. Non-time-of-use residential consumers will also see a revision of their applicable tariff as well as a change in the methodology of their calculation.

Protected and Unprotected Consumers: In accordance with SRO 1004 of July 7, 2022, the tariff rates and slab structure for the tariff for residential consumers not protected by ToU (i.e. consumers with a sanctioned load less than 5 kW) have changed.

“Protected” consumers, under tariff terms offered by the GoP as part of its Electricity Subsidy Rationalization Plan and by Nepra as non-ToU residential consumers with monthly electricity consumption of 200 units or less , consistently over the past six months. All other residential consumers not subject to the terms of use fall into the unprotected category.

Previously, unprotected consumer categories had a previous installment in their billing (i.e. their billing was done in two installments), which has now been removed. Consumers in the unprotected category will now only be charged on a single slab their units fall into. As a result, tariff rates have also been adjusted downwards to minimize the impact on consumers.

Industrial customer bills: Industrial consumers previously benefited from a relaxation from the Government of Pakistan, allowing them to use electricity during peak hours at the same tariffs as off-peak hours. This relief was authorized until June 2022 and, therefore, without further extension. Peak tariffs would now also apply to industrial consumers.

Similarly, zero-rated (or export-oriented) industries received electricity at a fixed rate of 9 cents USD/unit, which was applicable until June 2022, has now been removed. From now on, these industries will be charged according to the tariff rates applicable to normal industrial consumers.

In addition to the charges above, it should also be noted that current charges under the FCA will apply to July bills in KE’s service territory.

Retailer Tax for Commercial Consumers: In accordance with the Government of Pakistan Finance Act 2022 applicable across the country, the retailer tax on unregistered retailers has been revised and comes into effect on July 1, 2022. For Consumers at the commercial rate, a minimum flat fee of Rs 3,000 will be applied. charged for bills between Rs 0 and Rs 30,000. Monthly bills between Rs 30,001 and Rs 50,000 will be taxed with Rs 5,000, while those with monthly bills exceeding Rs 50,0001 will be taxed with Rs 10,000.

It is important to note that taxpayers with inactive income will be charged double the taxable amounts.

In addition, these taxes will apply even if the consumer’s premises are not used.

Fuel Charge Adjustments (FCA): Unprecedented increases in the price of heating oil and NGRL were translating into higher electricity generation costs for utilities, as well as higher electricity costs for consumers. Under the tariff mechanism determined by Nepra, additional fuel costs are recovered from consumers in their bills through fuel charge adjustments (FCA) after review and approval by the regulator. In the decision for FCA, the regulator also indicates the month in which FCA is to be billed. For example, the March 2022 FCA was debited in June 2022.

Accordingly, in its determination for the month of April 2022, Nepra authorized KE to charge Rs. May 22 be recovered in two parts with Rs 2,6322 per unit billed in July and the remaining Rs 6,8860 per unit in August ’22 bills. This means that customers will see two entries for FCA in their July invoices, i.e. FCAs for April and May, respectively.

Speaking of the changes, the KE spokesperson said: “We understand that our consumers may have a number of questions about these revisions. To help them during this time, we’ve updated our website with Frequently Asked Questions. To reiterate, these changes are introduced under the applicable laws of the Government of Pakistan and the rules of the regulatory authority Nepra and are applicable nationwide.

Copyright Business Recorder, 2022