ECC approves power tariff increase
The Economic Coordination Committee (ECC) of the cabinet once again approved an increase in electricity rates by Rs1.09 to Rs2.89 per unit for various consumers of Karachi to bring it on a par with the rest of the country, with effect from September 1.
A meeting of the ECC presided over by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh, also ordered immediate disbursement of Rs4.7 billion tariff differential subsidy to KElectric and approved an amount of up to $142 million to rescue PIA's Roosevelt Hotel in New
York from hostile takeover.
According to an official announcement, the ECC "approved the summary moved by the Power Division for the rationalisation of eleven quarterly adjustments of K-Electric Limited from July 2016 to March 2019". These quarterly adjustments "will be notified with effect from 1st September 2020 to bring the tariff of K-Electric at par with what is currently in field for consumers of [exWapda] Discos (distribution companies)", it added.
Okays $142m for rescue of PIA's Roosevelt Hotel in New York from hostile takeover Based on Nepra (National Electric Power Regulatory Authority) determination, the ECC had approved in March this year an average Rs2.39 per unit increase in KE tariff to bring it on a par with uniform national power tariff. This tariff has been pending for almost three years (11 quarters). In summers, this works out at about Rs3bn per month, which drops to about Rs2bn or averages out at about Rs2.5bn.
Its application was stopped due to the Covid-19 situation at the time. The ECC again gave a go-ahead for its implementation with effect from July 1, 2020, but it was again withheld by the federal cabinet and Prime Minister Imran Khan on the desire of PTI members of the cabinet from Karachi amid floods and loadshedding.
However, as the problems continued, K-Electric was assured during a recent meeting at the Governor House of an immediate increase in its consumer-end tariff.
The non-payment of subsidy by the government and the freeze on tariff are creating cash flow problems not only for K-Electric but also for other power companies because of non-payment of dues against power purchased from the national grid, resulting in a secondtier tariff increase to finance the borrowing costs.
The KE tariff at present is Rs2.89 per unit (Kwh) lower than the rest of the country for almost all commercial categories, temporary residential, all bulk supply tariff, public lighting, residential colonies attached to industrial premises, and all industrial tariff categories.