Islamabad:
In a daring affirmation of its regulatory autonomy, the Pakistan surveillance dog informed the multi-year prices of K-Electric on the supply, distribution and transmission of K-2030-despite a motion of examination not resolved by the federal government.
The electricity regulator informed RS6.15 per unit increase in the basic rate for KE consumers. The government implements a uniform across the country and the government provides subsidies to KE consumers to implement a uniform rate.
The National Electric Power Regulatory Authority (NEPRA) advanced the notification after having determined that no legal bar existed to stop the implementation. He invoked his improved powers under a legal amendment of 2021, which allows the regulator to directly issue pricing notifications – an authority which was previously rested with the federal government.
The historic movement reflects the pressure of international lenders, including the IMF and the World Bank, to depoliticize reforms in the tariff and accelerated powers sector.
“This situation could affect KE’s financial health and undermine the continuity of power supply, ultimately affecting consumers and the wider energy market,” warned the Nepra in its declaration.
The newly notified average supply rate for KE is 39.97 per kilowatt hour for 2023-24, including RS 31.96 / kWh in electricity purchase cost, RS 2.86 for transmission, RS 3.31 for distribution and Rs 2.28 as a food margin. An adjustment of the previous year less RS 0.44 / kWh was also included.
NEPRA estimated that KE’s total income requirement for the year 2023-24 to Rs 606.9 billion, with 34.7 billion rupees allocated at the margin of the offer and Rs 36.2 billion rupees to cover the recovery losses.
Despite the official approval of the price, KE’s finances remain under high pressure. The resumption of the bill going to 91.5% during the financial year 2023-24 and planned to fall to 90.5% next year, the public service could face cumulative recovery nearly 97 billion rupees over two exercises. The NEPRA warned that the return operations on distribution of 21.6 billion KE rupees could be destroyed without support for the government or adjustments.
The NEPRA has simultaneously approved a distribution rate of RS 3.31 / kWh and RS 2.684 / kWh specifically to support an investment plan of 43.4 billion rupees during the seven -year multi -year price period.
The government had challenged the multi-year price of K-Electric (2024-30) approved by the electricity regulator last week, alleging that the public service obtained an undue favor of 750 billion rupees during the period of seven years at the price of the national chessboard, electricity consumers across the country and taxpayers in general.
In a press release, the energy division had announced that the six tariff interventions authorized by the NEPRA in KE involving a financial impact of RS453 billion rupees spread over seven years.
In addition to that, added the division, an impact on the cost of the higher fuel for the national average for 2024-25 alone meant an additional cost of RS41 billion, which, even if it remains flat, would translate into 287 billion rupees in seven years.
The division said that the government position was to request the examination of the determination of the NEPRA to guarantee equity and uniformity, the price must reflect real costs and reasonable yields to protect consumers and that there should not be an additional loss of ineffectiveness.
