New billing slabs proposed in power subsidy rationalization plan

August 10, 2021 (MLN): The government has presented a three-phase power subsidy rationalization plan on Monday, proposing to create new billing slabs for power consumers while expanding the units of lifeline consumers from 50 to 100 per month for a gradual decrease in electricity subsidies.

This subsidy rationalization plan was discussed at a public hearing held by National Electric Power Regulatory Authority (NEPRA) which has been agreed with lending agencies - the World Bank and the International Monetary Fund. Chairman Authority Tauseef H. Farooqi presided over the hearing and that was attended by all the provincial members.

In the hearing, Chief Executive Officer (CEO)/Additional Secretary (Power Division), Waseem Mukhtar, Joint Secretary, Mehfooz Bhatti, Naveed and Mateen Bukhari represented Power Division.

According to Business Recorder, the authority framed the two following questions: (i) what is the financial impact of the policy guidelines on different categories of consumers as well as on Discos? and (ii) whether the proposed guidelines shall be applied retrospectively or prospectively?

The power ministry officials told Nepra that those consuming up to 200 units monthly are the lifeline consumers who do not have any luxury appliances and require subsidies. They called for creating a category of protected consumers keeping in view their six-month power consumption. They also wanted new slabs for consumers utilizing 301 to 700 electricity units. After the hearing, the authority reserved the verdict.

The authority observed needs clarification, particularly the six-month consumption average, the move to the next slab, and the one slab benefits. CPPA-G seeks immediate implementation of the subsidy phasing out a plan without waiting for a determination of DISCOs for FY 2021-22.

According to official sources, the Nepra chief expressed disappointment with the officials of the Ministry of Energy and Power Division, asking them to simplify the electricity billing. He told the ministry officials that they are introducing new slabs for power consumers while new tariffs which would deal a severe blow to the power consumers would be brought in the next phase. He said the government does not want to hurt the power consumers with excessive bills, the report by the News highlighted.

Tauseef Farooqi said NEPRA was not satisfied with the technical problems and the increasing power distribution losses. Power Division officials told the authority that the federal government would subsidize lifeline consumers through the Ehsaas program. The current plan would remain in place until all utilities and other financial activities of the people were not linked to CNIC, it added.

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