SC-backed Nepra decision: KE gets nod to recover Rs3 per unit subsidy from 2019

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has allowed K-Electric to recover Rs3/unit subsidy, previously extended to industrial consumers.

The subsidy was provided as part of the federal government’s 2019 industrial relief package. 

The power regulator’s decision comes after the Supreme Court of Pakistan’s stance that the government has the prerogative to withdraw subsidies. This allows KE to recover the Rs3/unit subsidy availed by industrial consumers from July to December 2019. In accordance with the apex court’s judgment in January 2023 regarding civil appeals, the power regulator has modified the Schedule of Tariff (SoT) of K-Electric.

On January 1, 2019, the federal government had approved a relief package, lowering industrial consumers’ rates by Rs3 per unit, inclusive of future FCAs. The government was responsible for reconciling any payment discrepancies between industrial consumers and the special relief package as part of subsidy payment rationalisation.

In May 2019, a Rs3 per unit reduction was done in K-Electric’s industrial tariff for both peak and off-peak hours. However, on July 12, 2019, the government limited the subsidy to peak hours only. However, they didn’t update the rules to remove the discount during non-peak hours. In January 2020, they fixed this by changing the rates in K-Electric’s rules, making it effective from July 2019. K-Electric then took back the discount it had given to industrial consumers between July and December 2019 and started collecting the money.

Consumers didn’t like this and went to the Sindh High Court and then to the Supreme Court of Pakistan. The superior court dismissed their complaints and sent the issue back to Nepra asking it to change the rules for K-Electric. The discount was removed, following the Supreme Court’s decision.