The National Electric Power Regulatory Authority (Nepra) has unveiled a new electricity tariff structure that includes fixed monthly charges for all consumer categories, effective from July 1, 2024. This significant change is intended to help distribution companies (Discos) enhance their revenue through fixed charges.
According to a report by The News, the new tariff structure includes substantial increases in fixed charges, particularly for commercial and industrial consumers. Fixed charges for commercial consumers will see an increase of up to 300%, while industrial consumers will face increases of up to 355%.
Residential Consumers:
For residential consumers, the new fixed charges will vary based on usage:
– 301-400 units per month: Rs200
– 401-500 units per month: Rs400
– 501-600 units per month: Rs600
– 601-700 units per month: Rs800
– Above 700 units per month: Rs1,000
Residential consumers with time-of-use (ToU) meters will also be charged Rs1,000 in fixed charges monthly.
Commercial Consumers:
Commercial consumers will experience significant changes:
– Load less than 5kW: Rs1,000 per month
– Load of 5kW and above: Rs2,000 per month (up from Rs500, marking a 300% increase)
Industrial Consumers:
Industrial consumers will also see notable increases:
– B1 category (up to 25kW under ToU metering): Rs1,000
– B2 category (up to 500kW): Rs2,000 (a 300% increase from Rs500)
– B3 category (5,000kW): Rs2,000 (a 335% increase from Rs460)
– B4 category (all loads): Rs2,000 (a 355% increase from Rs440)
The current cost structure of electricity includes 72% fixed charges and 28% variable charges. Despite this, fixed charges only contribute 2% to the revenue, with variable charges making up the remaining 98%. The new tariff design aims to better align cost and revenue structures by increasing the contribution of fixed charges.
In addition to these changes, the government plans to submit a petition to Nepra seeking a uniform tariff for the fiscal year 2025 (FY25). Nepra has already determined an increase in the base tariff for FY25 to Rs5.72 per unit. This is part of the proposed changes aimed at boosting revenue, with the power sector expecting to generate over Rs3.763 trillion in revenue for FY25.
For the current fiscal year (FY24), the base tariff was set at Rs29.78 per unit with an increase of Rs4.96 per unit. The new base tariff for FY25 is expected to rise to Rs35.50 per unit.
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