Why Your August Bills May Confuse You

Thousands of confused and angry customers have taken to social media decrying that their electricity bills that are getting increasingly convoluted, with their claims ranging from “inflated and over-priced bills” to conspiracy theories of collusion between distribution companies (Discos) and the government.

The frustration may be valid as an overblown bill is a major setback as we grapple with rising inflation. But the question remains – what is going on?

If you are wondering why your August bill looks “inflated”, one of the major reasons is that after the passage of the money bill for FY22-23, the “real cost” of energy usage is beginning to reflect in our electric bills as most subsidies are phased out in the Finance Act of 2022, passed by the Parliament of Pakistan.

And these changes came rapidly – 2 separate SROs (official notifications from the Power Division of the Ministry of Energy through NEPRA) were released in just the month of July.

This meant that one calculation system was in place until the 6th of July; the second suddenly kicked in from the 7th of July to the 24th of the month, and the third – which is currently applicable – instructed distribution companies to change rates in a phase-wise manner from 25th July to 31st July, and then on 1st August, and 1st October.

For consumers, this meant that their billing was being calculated up to 2 different ways in the same month, making already complex bills an undecipherable nightmare.

While consumers wrapped their heads around the current and prospective changes, the ghost of consumption past is also lurking as FPA from past months is being applied to bills. NEPRA recently approved a hike of almost PKR 10/unit for XWDISCOs for units consumed in the month of June, which will be applied in August.

For the curious, a helpful (though technical) explainer of how the FPA works can be read here. The result was customers who posted on Voice of Customer – a Facebook Community Group – expressing their shock over the ‘torment’ at the hands of ‘ruthless monopolies’.

Farhan, a customer connected to Lahore Electric Supply Company (LESCO), who had 93 units less in July than the preceding month, couldn’t understand the increase and asked, “Does it seem reasonable? Is this inflation effect of only 1 month?”.

Another commented, “Welcome to ‘Purana Pakistan’,”. Some were thinking to switch completely including a consumer, who suggested to, “Cut off electric [line] at this point and shift to generators at night.” Some went to the extent of rousing others to protest.

A customer named Mehwish Khawaja did some rabble-rousing, “Time to wake up nation. Let’s start a protest call. It’s been 75 years these idiot bureaucrats are looting our hard-earned money that is also halaal. Kab tak we will be grinded like animals. Any lawyers here who can file a petition on this. We all can split your court fees.”

With over 30 million electricity connections across Pakistan, Distribution Companies had to simplify the billing mechanism for the ease of the electricity consumer. The best solution was to bill units consumed on a pro-rata basis and with an “average rate” billed to the customer.

For example, the following, dry-looking bill for the Islamabad Electric Supply Company (IESCO) whose reading date was on 14th July 2022 will follow the tariff regime effective up to 24th July.

Similarly, a bill from Multan Electric Power Company (MEPCO) will follow the same effective implementation of tariff rates up to 24th July 2022.

Or in the case of this bill from Lahore Electric Supply Company (LESCO), where the reading date was on 2nd August 2022. The effective SRO issued on the 25th of July will be applicable along with the relevant FPAs for July.

For Karachi customers, K-Electric has clearly listed the billed units according to the corresponding SRO No. in the bill shown below. The reading date was 28th July; therefore, the billed units are split between the applicable SRO for the period.

They also have an FAQ section that lists down the tariff changes in a methodical manner that customers may find useful.

The primary concern for customers is an affordable and simple monthly bill. But when changes come frequently, it is easy to lose the plot. Taking some time to understand what is going on behind the scenes can help us the impact it will have on our bills.

Many of these tariff updates have been posted on NEPRA’s website for each electric supply company. That way, we can plan our consumption and budget accordingly. After a string of changes, the current tariff structure seems to be in place until 1st October and beyond.

We can only wait with bated breath and hope it stays this way.

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