Govt Moves to Slash Electricity Tariffs Amid Rising Consumer Concerns
BUSINESSNEWS
Govt Moves to Slash Electricity Tariffs Amid Rising Consumer Concerns
The government has initiated measures to ease the burden of high electricity tariffs by passing on savings from terminated and revised Independent Power Producers (IPPs) contracts to consumers and by considering tax reductions.
The Ministry for Energy revealed that agreements with five IPPs have been terminated, yielding savings of Rs411 billion. Additionally, renegotiated tariffs for eight bagasse-based power plants are expected to save Rs238 billion, while contract revisions with 16 IPPs will result in savings of Rs481 billion. These financial benefits will be directly passed on to power consumers.
To further mitigate the pressure of high tariffs, the government is exploring tax cuts to reduce the overall electricity costs.
Net-Metering Applications and Challenges
High electricity tariffs have led to a surge in net-metering applications, surpassing the country’s production capacity. Pending applications with distribution companies (DISCOs) have reached 4,742, with significant backlogs in:
IESCO: 1,363 applications for 12,276 MW capacity
GEPCO: 117 applications for 6,282 MW capacity
LESCO: 699 applications for 6,143 MW capacity
FESCO: 871 applications for 12,399 MW capacity
K-Electric: 773 applications for 10,164 MW capacity
The primary cause for delays is the high buy-back rates, prompting the National Electric Power Regulatory Authority (NEPRA) to recommend a revised, balanced tariff structure. NEPRA has also urged promoting solar usage at the household level instead of large-scale solar projects to improve the system’s efficiency.
Net-Metering: A Path to Energy Independence
In the face of rising energy costs and environmental concerns, net metering has emerged as a transformative solution for Pakistani households. This policy enables users to generate renewable energy, particularly through solar systems, reducing dependency on traditional utility providers.
Net metering has not only offered financial relief by lowering utility bills but has also fostered a culture of innovation and energy self-reliance. It is paving the way for a more sustainable and consumer-driven energy ecosystem in the country.
By embracing renewable energy and adopting consumer-focused policies, the government is taking critical steps to address Pakistan’s energy challenges and ensure a more balanced and sustainable future.