Sunday, December 5, 2021

Govt will provide Rs1.3 billion to K-Electric users

To implement the winter incentive package for energy consumers on extra usage, the government will provide an additional supplementary grant of Rs1.3 billion for further subsidies to K-Electric users.

In order to determine the real marginal cost to be used for subsidy purposes, the National Electric Power Regulatory Authority will give the information (Nepra). Furthermore, Nepra shall establish an adequate process for adjustment, taking into consideration the existing tariff determinations of K-Electric.

During its meeting on September 13, 2021, the Cabinet Committee on Energy (CCOE) approved, in principle, the winter incentive package on incremental consumption for all domestic, commercial, and general service consumers of former distribution companies. -Wapda from November 1, 2021, to February 28, 2022. The Energy Division has been informed of this development.

Furthermore, the CCOE asked the Power Division to resubmit the summary with consistent application of the package to consumers of both ex-Wapda distribution businesses and K-Electric, and also considered the possibility of evaluating the concessionary rate at Rs12.96/kWh as an alternative.

To this end, an incentive package was proposed for all home, commercial, and general services consumers of ex-Wapda distribution companies and K-Electric for the winter months of November to February. This package was designed to help consumers save money during the winter months.

It will be between November 2020 and February 2021 that the reference period for incremental consumption will be used.

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It said that residential consumers (non-ToU) will be taxed at the rate of Rs12.96/kWh on any incremental consumption in excess of 300 units per month or in excess of the reference consumption in the corresponding months of the reference period, whichever is larger.

According to the Power Division, commercial consumers (non-ToU) and general services consumers will be charged at a rate of Rs12.96/kWh for any incremental consumption above the reference consumption in the corresponding months of the reference period.

Domestic consumers (ToU) and business consumers (ToU) will be charged at the rate of Rs12.96 /kWh on the incremental peak/off-peak consumption that exceeds the reference peak/off-peak consumption in the corresponding months of the reference period in the months following the reference period.

The same package would be supplied at the concessionary rate of Rs12.96/kWh to both new and existing clients who do not have any reference consumption available throughout the period of November 2020 to February 2021. This will be done through the benchmark consumption approach.

On increased consumption, there would be no need for quarterly adjustments to be applied.

Only positive fuel price revisions will be communicated to consumers who have purchased an incremental consumption package based on their incremental consumption levels. It is expected that the actual subsidy realized for the proposed projects will be independent of any other planned subsidies for the power industry.

The CCOE took into consideration the summary given by the Power Division about the ‘Winter Incentive Package for Electricity Consumers on Incremental Consumption’ and accepted the proposed incentive package for electricity consumers on incremental consumption.

It was decided by the CCOE to postpone the decision on revisions to gas tariff slabs for domestic (residential) consumers during the winter months and to revisit the issue at a later date during its next meeting. Following the submission of a summary of the case by the Petroleum Division, the cabinet body was briefed on the situation. A complete adjustment in present domestic gas slabs, as well as a comparison with LPG (which is an alternate fuel for residential consumers), had been developed by the Petroleum Division, according to the information provided.

Also disclosed was that the gas tariff for the first two domestic slabs, which accounted for 78 percent of total users with gas consumption accounting for 57 percent of total consumption in the home supply, would remain unchanged.

The rest of the slabs, on the other hand, were intended to be updated. The Petroleum Division presented a revision of residential gas pricing slabs for discussion and approval by the Cabinet Committee between November 2021 and February 2022, which was considered and approved by the Cabinet Committee.

It was said by the minister of science and technology that no attempts were being made to improve energy efficiency and that it is necessary to modify customer behavior by introducing smart appliances, among other things. A consensus was reached on the necessity to introduce energy-efficient appliances, and that the PSQCA can play a key role in this endeavor.

CCOE established a committee under the chairmanship of the Minister of Science and Technology to make recommendations on policies and incentives to encourage the use of energy-saving equipment (electric & gas). The committee must present its findings to the CCOE within one month of its formation.

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