KE Announces Changes in Electricity Rates and Tariff Structure

In line with the governing laws, rules, and regulations of the Government of Pakistan and the National Electric Power Regulatory Authority (NEPRA), various changes have been made to the rates of electricity and tariff structure that will be effective from July in K-Electric’s service territory, the company said in a statement on Sunday.

KE said that these changes include the non-extension of relief for zero-rated industries as well as the relief on peak-hour electricity consumption for industrial consumers.

The retailer tax with revised slabs has been introduced for commercial consumers. Non-Time of Use residential consumers will also see a revision in their applicable tariff along with a change in the methodology for their calculation, the statement said.

Tariff Rates and Slab Structure

As per SRO 1004 dated 7th July 2022, the tariff rates and slab structure for tariff of unprotected non-ToU residential consumers (i.e. consumers with sanctioned load below 5kW) have changed.

Previously, the category of unprotected consumers was provided the benefit of one previous slab in their billing (i.e. their billing was done in two slabs), which has now been removed. Consumers in the unprotected category will now only be charged on one slab in which their units fall. Accordingly, tariff rates have also been adjusted downwards to minimise the impact on consumers.

Industrial Customers Bills

Industrial consumers were previously being provided a relaxation by the government, allowing them to utilize electricity during peak hours at the same rates as off-peak hours. That relief was allowed until June 2022 and accordingly with no further extension. Peak rates would now be applicable on industrial consumers as well.

Similarly, zero-rated (or export-oriented) industries were being provided electricity at a fixed rate of $9 cents/unit, which was applicable till June 2022, has now been removed. Now, these industries will be charged as per applicable tariff rates to normal industrial consumers.

Retailer Tax for Commercial Consumers

Similarly, under the Finance Act 2022, retailer tax on unregistered retailers has been revised and effective from 1st July 2022. For consumers on commercial tariff, a minimum fixed tax of Rs. 3,000 will be charged for bills between up to Rs. 30,000. Monthly bills between Rs. 30,001 and Rs. 50,000 will be taxed Rs. 5,000, while those with monthly bills above Rs. 50,001 will be taxed PKR 10,000.

Moreover, the inactive income taxpayers will be charged twice the taxable amounts. These taxes will apply even if the consumer’s premises are not in use.

Fuel Charges Adjustments (FCA)

Under the tariff mechanism determined by NEPRA, incremental costs of fuel are recovered from consumers in their bills via fuel charges adjustments (FCA) after the regulator’s scrutiny and approval. Within the decision for FCA, the regulator also states in which month FCA is to be charged.

Accordingly, in its determination for the month of April, NEPRA has allowed KE to charge Rs. 5.2718 per unit for units consumed in April to be billed in July. Further, NEPRA has allowed the FCA for May to be recovered in two parts with Rs. 2.6322 per unit charged in July and the remaining Rs. 6.8860 per unit in the bills of August. This means customers will see two entries for FCA in their July bills i.e., FCAs for April and May, respectively, the statement said.

KE spokesperson said that these changes are introduced under the governing laws of the Government of Pakistan and the rules NEPRA and are applicable across the country.

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