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NEPRA Imposes 14% Markup on Delayed Electricity Payments Amidst Record High Tariffs

ISLAMABAD: Amid soaring electricity tariffs, consumers struggling with financial difficulties and seeking installments to pay hefty bills are now legally required to pay a 14 percent markup on delayed payments and will be barred from future part-payment facilities for a year.

Additionally, a 10 percent Late Payment Surcharge (LPS) will apply if a bill is not paid by the due date specified on the consumer bill.

The National Electric Power Regulatory Authority (Nepra) has announced this change through an amendment to the Consumer Service Manual (CSM) at the request of the Power Division and its distribution companies (Discos). This amendment also affects K-Electric consumers.

However, Nepra rejected several harsh punitive measures against electricity consumers. These included high urgent fees for priority new connections, restrictions and penalties on multiple connections at one location, and increased penalties on detection bills issued for suspicious consumption, such as slow meters, defective meters, or theft.

In its notification, Nepra stated that no markup or LPS would be charged if the first installment is paid by the due date for consumers requesting installments for the current month’s bill. However, “the remaining installments shall be paid with the markup at 14 percent per annum on a pro-rata basis,” and the installment facility will be allowed only once per financial year.

The notification also stipulated that consumers must request extensions on due dates before the bill’s due date. Discos and K-Electric will generate computerized bills allowing instalments and extensions on due dates.

Former Energy Planning Commission member Syed Akhtar Ali criticized Nepra’s decision. He argued that if Nepra permits a markup on instalments, it should also regulate LPS rates, as the current 10 percent LPS or markup for a month is excessively high. He suggested that the LPS should be no more than 2 percent, considering the prevailing market-based policy rate of 22 percent. “This is a one-sided decision,” he said, adding, “When you allow Discos to improve their revenue through a 14 percent markup on installments, you need to reduce LPS. It is excessive.”

A Nepra official noted that Discos were already charging the 14 percent markup independently, and the regulator merely formalized this after a public hearing. He mentioned that Nepra had rejected Discos’ demand for an ‘urgent fee’ of Rs15,000 for a single-phase and Rs30,000 for a three-phase meter for early connection. This fee would have been in addition to the normal fee and charges for new connections for domestic or commercial consumers up to 15 kilowatts and up to 8kw for industrial and agricultural consumers, where only energy meters and cable are involved but no distribution transformer.

Currently, new connections are provided within 30 days for these categories against payments of Rs8,500-11,500 for single-phase meters involving 20-40-meter cable and Rs36,500-50,000 for three-phase meters.

Discos had also sought permission to confiscate electric appliances and equipment and impose heavy penalties, such as ‘detection bills’ equivalent to five years of power consumption for consumers and premises found guilty of electricity theft. They also requested the removal of multiple connections and separate electricity meters on residential premises without direct and separate entrances from the main roads.

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I am an accomplished graduate of Strategic Studies, driven by a fervent dedication to comprehending global affairs and devising impactful strategies. Equipped with a comprehensive skill set encompassing research, critical thinking, and persuasive communication, I possess a distinctive viewpoint and an unwavering commitment to fostering inclusive decision-making processes. As a versatile individual, I excel in collaborating with diverse groups in various settings, leveraging my strong interpersonal abilities to adapt seamlessly to new environments and surmount any challenges that arise. With a passion for contributing to strategic initiatives, I am eager to leverage my expertise and drive to effect positive change within the field.

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