ECC okays tariff hike for KE
ISLAMABAD: The government on Monday approved a hike in electricity prices for Karachi consumers and also amended the National Electricity Transmission Policy to award two projects to the Gulf countries in accordance with the directives of the Special Investment Facilitation Council (SIFC).
Decisions were taken by the Cabinet’s Economic Coordination Committee (ECC), headed by Finance Minister Ishaq Dar. The ECC approved a Rs80 billion foreign remittance incentive package and gave green light to a Rs30 billion subsidy package for the poorest customers of the Utility Stores Corporation (USC).
The committee approved a brief to apply uniform rates to K-Electric (KE) consumers by rationalizing rates, according to the finance ministry. It gave the go-ahead to rationalize tariffs for KE through adjustments that would be applicable for consumption in April, May and June 2023, which would be recovered from consumers in three months (July, August and September 2023 respectively).
In fact, consumer prices will increase by about Rs 5 per unit, including applicable taxes and fees. The committee shortened the rate approval process and approved the issuance of new guidelines for the National Electric Power Regulatory Authority (Nepra). It ordered that in order to maintain uniform tariffs across the country, Nepra would determine the application of quarterly tariffs for state-owned distribution companies and the same would be considered for changing KE tariffs.
Ordered that the grant in relation to the fixed rate would be assessed on an annual basis rather than on a monthly or quarterly basis. The ECC also approved a summary from the Ministry of Energy on the proposed amendments to the 2015 Transmission Line Policy (for the inclusion of utility projects in its scope), according to the Ministry of Finance.
The changes are being made to incorporate two energy projects that the joint civil-military SIFC has approved to offer to the Gulf countries. These projects include 2,000 MVAR reactive compensation and 1,000 MVAR battery energy storage system. They fall under the category of auxiliary services. SIFC has approved 28 projects to offer to the Gulf countries under negotiated agreements, including 10 projects in the electricity sector. These 10 projects include two schemes related to transmission lines.
Published in EDP BLOGS on August 14,2023.
