Friday, September 29, 2023

Electric Power tariff decrease after privatization of companies

According to Tauseef Farooqi, Chairman of the National Electric Power Regulatory Authority (Nepra), privatization of power distribution businesses can lead to improvements in efficiency and, as a result, to a reduction in the cost of electricity distribution.

On Thursday, he spoke at a public hearing on the package for incremental electricity use during the winter season, during which he discussed an extension of the package for K-industrial Electric’s customers, according to the company.

During the hearing, officials from the National Environmental Policy Act (Nepra) stated that the government had requested approval of the package from November 2021 to February 2022. The bundle will be available to customers of ex-Wapda distribution businesses and K-Electric who use more than 300 units per month and are eligible for a discount.

Following the adoption of the package, a member of the Nepra expressed concern that expensive plants will be forced to operate as a result.

Officials from the Power Division stated that if consumption increases in January, the need for liquefied natural gas (LNG) for electricity generation will increase in the winter months.

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They also stated that strategic action plans were being developed in consultation with all of the distribution businesses, which they described as follows: Officials from the Power Division stated that, given the current circumstances, there is a disparity in fuel pricing between the states.

Since the implementation of the industrial package, power consumption has climbed by 4% on average.

According to Nepra, the industrial package for K-Electric customers will provide electricity at a rate of Rs12.96 per unit rather than Rs14.61 per unit, as was previously announced by the company.

According to a K-Electric official, the industrial package is completely ineffective for the city’s consumers. Industrial packages, according to the chairman of the National Economic and Planning Research Association, were groundbreaking since they contributed to enhancing economic growth.

Specifically, the Ministry of Energy (Power Division) stated that the Cabinet Committee on Energy (CCOE) had authorized the winter incentive package for all home, commercial, and general service consumers of former Wapda distribution companies and K-Electric, which was effective immediately.

The Central Committee on Electricity (CCOE) had issued instructions that the actual marginal cost, to be used in the calculation of K-subsidy, Electric’s should be provided by Nepra and that the power regulator was also responsible for the provision of an appropriate mechanism for adjustment of the same, taking into consideration the existing tariff determinations of K-Electric.

Domestic, commercial, and general service consumers of ex-Wapda distribution companies and K-Electric for the winter months (November to February) will be covered by a proposed package for the winter months (November to February), with the reference period for incremental consumption running from November 2021 to February 2022.

Domestic consumers (non-time of use) will be taxed at the rate of Rs12.96 per unit 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, starting from January 1, 2019.

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