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Sunday, May 19, 2024

CCoE extends flat tariff for industries till 30th June 2020

The policy was extended despite concern from the Power Division that this might lead to increase in the loadshedding and power stations tripping during core months ranging from May to September.

The Cabinet Committee on Energy has extended the flat electricity tariff to industrial consumers without applying the expensive peak time charges.

The power division had contentions to this, however, the raised concerns were ignored. The committee also was unable to resolve the ongoing dispute between NEPRA and the Power Division over the future of around a hundred Alternative and Renewable Energy (ARE) projects.

The said meeting was chaired by the Minister for Planning, Development, and Special Initiatives Asad Umer.

Minister for Energy Omar Ayub Khan, Federal Minister for Maritime Affairs Abdul Razak Dawood, Adviser to the Prime Minister on Commerce & Investment, Special Assistant to PM on Power Revenue, and official of various Ministries/Divisions attended the meeting.

Read More: Why Regionally Competitive Energy tariffs are needed for textile sector!

According to Dawn, the CCoE had abolished the Time-of-Use (ToU) tariff scheme for the industries on 2nd November last year. A review to determine whether to continue the peak and off-tariff’s abolishment beyond April 2021 or otherwise, was supposed to be held by 31st March of 2021.

It was announced that the CCoE approved a proposal by the Power Division on the extension of the ToU Tariff Scheme for Industrial Consumers from May 1st, 2021 to June 30th of 2022.

The power division was of the view that this would be a burden for the national exchequer as for the core months of May to September such a subsidy would drain the government of Rs26 billion and would be technically unfeasible as consumption patterns are high. This scheme could lead to the tripping of power stations and heavy load shedding.

The division also presented an alternative proposal according to the national news media outlet. The Power Division suggested that the incentives could be applied from the end of September onwards to maintain healthy consumption patterns and better resource allocation.

This would allow increased consumption without hindrance and that could be sustained for many years to come.

Some participants sided with the CCoE’s opinion for the provision of subsidy as they noted that the country’s industry was showing growth over recent times, and thus the industrial sector shall be supported with this flat tariff along with other provisions. This included a consistent supply of LNG and furnace oil to the industry.

The NEPRA was accused by the Power Division of issuing cost-plus-based tariffs and licenses to ARE projects.

Read More: NEPRA saves billions by reducing tariff of 12 thermal power plants