NEPRA Announces New Fixed Charges for Domestic Electricity Consumers

The National Electric Power Regulatory Authority (NEPRA) has announced the implementation of fixed charges for domestic electricity consumers starting from today. The new structure aims to streamline revenue collection for electricity distribution companies and will affect consumers based on their monthly electricity usage.

Fixed Charges Breakdown

For Domestic Consumers:

• 0-200 Units: No fixed charges.
• 301-400 Units: Rs. 200 per month.
• 401-500 Units: Rs. 400 per month.
• 501-600 Units: Rs. 600 per month.
• 601-700 Units: Rs. 800 per month.
• Above 700 Units: Rs. 1,000 per month.

The new fixed charges are designed to generate additional revenue for the country’s electricity distribution companies and ensure better maintenance and operational efficiency.

Implementation and Rationale

Purpose:

• Revenue Boost: These charges will help boost the revenue streams of electricity distribution companies, which is crucial for enhancing service quality and infrastructure improvements.
• Cost Recovery: They are intended to help recover costs associated with electricity supply, including distribution and maintenance.

Usage Categories:

• Tiered Structure: The fixed charges follow a tiered structure based on electricity consumption, ensuring that higher consumption results in higher fixed charges.
• Encouraging Efficiency: By imposing higher charges on higher usage brackets, the policy encourages consumers to manage their electricity consumption more efficiently.

Changes in Electricity Distribution Boards

In related developments, the federal cabinet has approved significant changes to the boards of nine public sector electricity distribution companies. The move aims to enhance the governance and performance of these entities. The decision, endorsed by the Cabinet Committee on State-Owned Enterprises, follows recommendations from the Board Nominations Committee led by the Federal Minister for Power.

Affected Companies:

• Boards to be Reconstituted:
  • Lahore Electric Supply Company (LESCO)
  • Faisalabad Electric Supply Company (FESCO)
  • Multan Electric Power Company (MEPCO)
  • Gujranwala Electric Power Company (GEPCO)
  • Islamabad Electric Supply Company (IESCO)
  • Peshawar Electric Supply Company (PESCO)
  • Karachi Electric Supply Company (KESCO)
  • Tribal Areas Electricity Supply Company (TESKO)
  • Hyderabad Electric Supply Company (HESCO)

Boards Not to Be Reconstituted:

• Sukkur Electric Power Company (SEPCO)
• Hyderabad Electric Supply Company (HESCO)

Legislative Changes:

• The government has introduced amendments to the Act of 2023 related to state-owned enterprises to facilitate the dissolution and reconstitution of the boards. An ordinance has been introduced to remove legal obstacles and simplify the process.

Impact on Consumers

• Cost Management: Consumers will need to account for the new fixed charges in their monthly budgeting. The charges will be included in the electricity bills starting this month.
• Awareness: Distribution companies are expected to inform consumers about the changes and how they will be applied.
• Feedback and Support: Consumers are encouraged to reach out to their respective electricity distribution companies for any clarifications or assistance regarding the new charges.

Summary

• Fixed Charges Effective Date: July 1, 2024
• Charges: Rs. 200 to Rs. 1,000 per month based on consumption brackets
• Board Changes: Nine public sector electricity distribution boards to be reconstituted
• Legislative Support: Ordinance introduced to facilitate board dissolution and reconstitution

This new policy marks a significant step in addressing the financial sustainability of electricity distribution companies in Pakistan while aiming to encourage efficient electricity usage among consumers.