While seeking revision of tariff from commercial to industrial category, Pakistan Telecommunication Company Limited (PTCL) and mobile phone operators have approached NEPRA to get their electricity tariffs revised to avail the benefits available to industrial operators.
It maybe recalled that telecom sector was recently recognized as industry and hence is eligible to avail special tariffs for electricity.
Telecom industry, however, was charged as per old commercial tariffs, against which the entire industry has now approached NEPRA for downward revision in electricity rates.
Not to mention, electricity is one of the major opex contributors, so much that PTCL —in its petition to NEPRA — said that the company is facing great financial implications due to the increased electricity bills, and because of heavy loss the company is forced to close approximately 10 exchanges every month.
PTCL and all four mobile operators are entitled to benefit all the concessions available to “Industry” including industrial tariff of electricity for its exchanges and other installations, said PTCL and operators in a Tariff Petition under Section 46 of the Regulation of Generation Transmission and Distribution of Electric Power Act, 1997 (Xl Of 1997), Under The National Electric Power Regulatory Authority (Tariff Standards and Procedure) Rules, 1998, and Other Enabling Provisions of The Law: For Revision of Tariff from Commercial to Industrial
The petitions submitted to NEPRA further noted that the existing tariff of Telecom operators connections was the industrial tariff, B-1, and B-2 up to Nov 2001, then the Ministry of Water and Power, Govt of Pakistan dated 8-8-2001 revised the tariff A-2 (a) up to 20 kW and A-2 (b) above 20 kW separately. The schedule of the tariff was revised, and a new tariff A-2 (c) was approved by NEPRA w.e.f. 3-9-2007 which was applicable to all commercial connections exceeding 20 kW load (two-part tariff).
The schedule of the tariff was further revised dated 26-9-2008 and a new tariff A-2 (C) was approved by NEPRA which was applicable to all commercial connections exceeding 05 kW load.
Two-part tariff levied above 5 kW instead of above 20 kW. As per the two-part tariff, fixed charges and low power factory penalties were charged in the monthly electricity bills of all commercial connections having load 5 kW and above.
The telecommunication sector was declared as “Industry” by the Ministry of Industries and Production, Government of Pakistan dated 20-4-2004.
PTCL, therefore, was entitled to benefit from all the concessions available to “Industry” including industrial tariff of electricity for its exchanges and other installations. Through Finance 2021, an amendment is made in section 2(29C} of the Income Tax Ordinance, 2001 and a new clause “c” is inserted which declares Telecom Sector as an industrial.
It is submitted that Pakistan Telecommunication Company Limited (PTCL), has 19 regions across Pakistan and the company is the consumer of all DISCO’S is paying heavy amount of electricity bills. The company has 7823 connections and consumes 17 million units with a total bill payment of Rs. 339.84 million.
Due to the reduction of load limit of A-2 (b) tariff, the grievances of PTCL substantially increased as the bills of exchanges and other connections have gone up by 40 percent and the major factor of increase of bills has been the impact of fixed charges and low power factor penalties. There are 75 percent of telephone exchanges installed in the rural areas of Pakistan with small switching arrangements as per villagers’ demand.
The sanctioned/connected load of these connections falls between 5 kW to 40 kW and the running load of these exchanges is a maximum of 10 kW. In many cases, the sanctioned loads of these connections do not even reflect the actual load of this small load, especially in the winter season. Sometimes MDI recorded 3-4 times higher than the sanctioned load or deliberately wrong reading by the reading staff of DISCO’ S.
Also, no inactive power is recorded as there is no motive load; therefore, the range of power factor is already up to 1.0 percent. The PFI equipment has already been provided on each site.
As compared to revenue received, these exchanges are now facing great financial implications due to the increased electricity bills with the impact of fixed charges and LPF. Due to heavy loss in revenue, PTCL is forced to close approximately 10 exchanges every month.
The industry requests NEPRA Authority that Pakistan Telecommunication Company Limited (PTCL) be declared as an industry and “approval may be accorded for revision of tariff from commercial to industrial tariff as per sanctioned load of each connection”.
It bears mentioning that NEPRA will conduct a hearing on petitions on March 30, 2022.
