The National Electric Power Regulatory Authority (NEPRA) on Monday authorized the imposition of an extra surcharge of Rs3.39 per unit on the strength consumers of all electricity distribution organizations (DISCOs), together with K-Electric.
NEPRA decided on the utility of the federal government, searching for to jack up the surcharge with the aid of Rs3.39 per unit, which will be accumulated from the energy buyers from March to June 2023.
Currently, the energy consumers are paying a forty-three paisa per unit surcharge, while the complete surcharge to be paid by means of the electricity consumers will be Rs 3.82/unit with an impact from the current NEPRA approval. However, this surcharge will stand at solely Rs 1.43/unit at some point of the subsequent economic year. Earlier on March two (Thursday), 2023, NEPRA had raised serious questions over the federal government’s request for the imposition of an extra surcharge of Rs 3.39 per unit on electricity consumers.
NEPRA had held public hearings underneath the chair, Tauseef H. Farooqi, on the federal government’s movement in search of the regulator’s approval for inserting the burden of an extra surcharge of Rs3.39 per unit on the electrical energy consumers.
During the hearing, NEPRA had stated that the regulator was once now not positive whether or not the unheard-of make bigger in patron pricing was once inside its area or now not and had sought a criminal opinion on the matter. NEPRA officers had stated that already 0.43 paisa per unit was once being charged from consumers, and now the authorities desired to expand it to Rs3.82 per unit.
The extra surcharge of Rs 3.39/unit is to be utilized to the billing of customers from March to June 2023 to cowl the markup expenses of Power Holdings Limited (PHL) loans, which are now not included via the already relevant FC surcharge of 0.43 paisa per unit for the contemporary monetary year. After 4 months, the extra surcharge of Rs 3.39 per unit is predicted to be decreased to Re 1 per unit to cowl the markup fees of PHL; the whole surcharge would then end up Rs 1.43/unit for the new economic year.
The levying of an extra surcharge on the electrical energy tariff will allow the authorities to pay off the hobby on the loans of PHL, valued at Rs one hundred twenty billion. With the software of an extra surcharge, the whole surcharge will top at Rs 3.82/unit for the 4 months (Mar-June).
The modern-day surcharge being paid by means of electricity shoppers at a charge of 0.43 paisa per unit is earmarked to clear an pastime quantity of Rs forty four billion collected on loans from the PHL. Out of the complete excellent finance amenities of Rs. 800.253 billion as of June 30, 2022, servicing of loans or hobby costs quantities to Rs. 246.384 billion.
It is pegged to be paid again via the imposition of a Financing Cost surcharge at a price of 0.43 paisa per unit. This surcharge is now not enough to cowl markup expenses on complete PHL loans. The markup on last loans is being paid from income amassed thru electrical energy sales, and this constrains the repayments of different monetary obligations.
To summarise, the whole surcharge turns into Rs 3.82/unit for the stated period, and for the new monetary year, an extra surcharge of Rs 3.39/unit will be decreased to Re 1/unit to cowl the extra markup fees of PHL loans, which can’t be included via the already relevant FC surcharge of 0.43 paisa per unit.
This would yield a complete surcharge of Rs. 1.43/unit for the new economic year. The NEPRA chairman, who had presided over the proceedings, requested whether or not the authority may want to reject this proposed imposition of the surcharge, to which officers from the Power Division replied: “Yes, it can”. The chairman had stated that the regulator had sturdy reservations about the imposition of this surcharge, as these who have been loyal shoppers and many times paid their payments had been to pay Rs3.39/unit surcharge, whilst these who did no longer pay their payments had been rejoicing. “The authority is neither accepting nor rejecting this surcharge and has linked it with the felony opinions and requested the Power Division to take criminal views on it and then come to us. “We want the prison function of the authorities involving the imposition of a surcharge,” he said.
Effect On Consumers of PESCO
The chairman had stated that if NEPRA allowed recoveries in this way, then different techniques would emerge as redundant. “If the authorities has the authority, then it need to no longer shift the accountability onto NEPRA.
This situation did now not emerge in one day; we had quite a few instances forewarned the authorities of deteriorating electricity management, however no heed was once given. It suggests the inefficiencies of the strength division, due to which each and every yr the state of affairs receives worse. “NEPRA member Rafique Ahmad Shaikh had requested the division to do its homework on the issue, take prison views related to the surcharges, and then come to us. He stated that the surcharge will now not remedy the troubles dealing with the government. He had stated that the industrial tariff may want to go up to Rs 32/unit. Followed by way of the query “If industries choose for an alternate option, then how can the authorities recover?”. Ironically, the energy division respectable had no reply and stated that we had no longer regarded into this query so far.
The increasing prices of electricity have become a growing concern for many individuals, especially the common man. Electricity is an essential resource that is used in nearly all aspects of daily life, including powering homes, businesses, and transportation. As electricity prices continue to rise, the impact on the common man becomes increasingly significant.
One of the primary effects of increasing electricity prices is that it can cause a financial strain on individuals and families who are already struggling to make ends meet. Higher electricity bills can lead to reduced disposable income, which can have a ripple effect on the overall economy. People may have to cut back on other expenses, such as food, clothing, or entertainment, to compensate for the higher cost of electricity.
In addition to financial strain, increasing electricity prices can also lead to energy poverty. This occurs when individuals or families cannot afford to heat or cool their homes, which can have severe health consequences, particularly for the elderly and young children. Furthermore, energy poverty can limit educational and job opportunities, as individuals may have to prioritize basic needs over educational or career pursuits.
Lastly, higher electricity prices can also have an impact on the environment. As individuals struggle to pay their bills, they may turn to alternative sources of energy, such as wood or coal, which can be harmful to the environment and human health. This can result in increased air pollution, which can lead to respiratory illnesses and other health problems.
In conclusion, increasing electricity prices can have a significant impact on the common man, from financial strain to energy poverty and environmental concerns. Governments and utilities must work together to address these challenges by developing and implementing policies that balance the need for affordable energy with the need to reduce carbon emissions and protect public health.