To reduce gas demand: ECC okays winter package for power consumers

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet has granted its approval for the Winter Package of electricity on incremental usage from domestic, commercial, and industrial consumers. This package is aimed at incentivizing the utilisation of electricity from the national grid to collect money from consumers for paying off capacity charges that run into around Rs2.7 trillion for the current fiscal year.

The use of power drops significantly during the winter season, ranging from around 9,000 to 12,000 MW while in summer it peaks to the highest level of over 32,000 MW. Such a gap requires some incentives in the winter season to boost up consumption of electricity. In the aftermath of solarisation, there was a need to make incremental usage of electricity in the winter season.

The ECC met under the chairmanship of Federal Minister for Finance and Revenue Muhammad Aurangzeb in which the forum considered a proposal submitted by the Ministry of Energy (Power Division) regarding a winter demand initiative for the industrial, domestic ToU (Time of Use) and non-ToU consumers exceeding 200 units, commercial and general services consumers of Discos and K-Electric to enable optimum use of system generation capacity besides reducing gas demand due to shifting of favourable demand towards electricity.

It was proposed that under the initiative, a tariff of Rs26.07/kWh shall be charged to all eligible consumers on the respective incremental consumption, above the benchmark consumption in the corresponding months. The initiative would be applicable for a three-month billing period effective from December 2024 to February 2025.

The benchmark consumption would be the higher of either the relevant month’s consumption in FY2024 or the historical consumption over the past three years for the relevant months, based on a formula and terms and conditions laid before the ECC.

The ECC discussed the proposal and approved it, calling the subsidy-neutral interim relief initiative worked out by the Power Division as being timely and relevant in view of the recent surge in electricity tariffs and reduced demand across various consumer categories.

The ECC also considered a proposal submitted by the National Disaster Management Authority (NDMA) for the transfer of Rs3.140 billion balance of erstwhile Emergency Relief Cell (ERC) into the NDMA Fund to carry out its inland as well as overseas rescue and relief operations in line with the statutory mandate of the authority.

The proposal was discussed and approved with the proviso that since the balances in the ERC were made up of public donations and were granted for relief, rescue and rehabilitation of floods and earthquake victims, the NDMA would spend these balances for the stated purpose.