Islamabad August 10 2021: National Power Policy, 2013 approved by the Council of Common Interest Stipulates that the low-end consumers will be protected from any price escalation, and tariff rationalization will be done to eliminate subsidy with industrial, commercial and bulk consumers as well as a level playing field will be created by providing power at comparable prices to all industrial users. ECC approved the National Power Tariff and Subsidy Policy Guidelines, 2014.
NEPRA determined uniform tariff to be charged from the electricity consumer, including the impact of subsidy and inter-DISCO tariff rationalization, in term of section 31(4) of NEPRA Act, 1997. The latest uniform tariff in filed has been notified on February 12, 2021.
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In order to make effective utilization of tariff differential subsidy it is essential that it should be target to lower income group of the society rather that flat application on slab-based consumption below 300 units per month. Accordingly, the residential subsidies should be more targeted and it is essential that exclusion criteria are applied on the slabs below 300 units per month so that electricity subsidies for the residential consumers should be restricted to the lowest socioeconomic class of consumers.
Now after completion of Ehsaas survey and linkage of residential electricity meters with CNlCs, it will become possible to use Ehsaas socio-economic registry for provision of electricity subsidy. Until then electricity consumption itself can be used as a proxy for determining the socioeconomic status of the consumers and determining their eligibility for subsidy, because electricity consumption itself is a recognized measure of socio-economic status.
In view of the above, Prime Minister on 10th February, 2021, principally approved subsidy reform proposal and accordingly FCC of the Cabinet approve the three phased proposals for subsidy reform which placed at Annex-I. As per the first phase tariff structure to be modified / adjusted to ensure that the most vulnerable residential consumers are identified through electricity consumption so that they are fully or partially protected from future price increases.
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Keeping in view above, the following policy guidelines as approved by Federal Government for incorporation of the same through modifications / adjustments in the DISCOs Schedule of Tariffs (SOTs) as well as uniform SOT as was determined by NEPRA and notified by NEPRA including the KE Schedule of Tariff currently in field is hereby conveyed for consideration of Authority:
I. Expanded definition of the lifeline consumers to include residential Non-Time of Use (ToU) consumers having maximum of last twelve months and current month's consumption ~ 100 units; two rates for ~ 50 and ~ 100 units will continue.
II. Create a new category of protected consumers those consuming < 300 kWh slab as today.
III. Break the 301-700 slab into four slabs — 301-400, 401-500, 501-600 & 601-700 with the same marginal tariff.
IV. Each of these slabs would continue to get the previous slab benefit of < 300 kWh slab as today.
V. The Federal Government intended to implement the proposal modified / adjusted tariff structure as mentioned I to IV above with effect from 1st June, 2021.