Cabinet approves seasonal electricity package

Govt facing conundrum of high capacity payments for unutilised electricity

The federal Cabinet on Tuesday approved the seasonal electricity package for domestic and commercial consumers in a bid to encourage power consumption during off-peak months during winter season and reducing capacity payments.

Making the announcement on his Twitter handle in this regard,Minister for Energy Hammad Azhar said, “Any additional electricity consumed by domestic and commercial consumers during Nov-Feb period compared to same time previous year will have a discount of Rs5 to Rs7 per each unit.”

Earlier in September, Azhar had said that the success of the Industrial Energy Package demonstrates that such incentives provide relief and absorb part of surplus capacity.

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It is pertinent to mention here that the government, during off-peak months, is facing the problem of low power demand while it has to pay high capacity payments for unutilised electricity. On the other hand, consumers will be facing severe gas shortages due to high demand of gas.

As per details, the demand for electricity during November to February drops to less than 10000 MW against the installed capacity of 33000MW, creating the issue of capacity payments to idle power plants.

Earlier in the winter of fiscal year 2019-20 (FY20), the Pakistan Tehreek-e-Insaf (PTI) government had introduced flat tariff regime at Rs11.97 per unit for electricity consumers of domestic, commercial and industrial sectors using Time of Day (ToD) meters from November 1, 2019 to end February, 2020.

Last year, the PTI government had announced a major relief package of electricity tariff for general, small and medium enterprises (SMEs) to encourage higher power consumption and manufacturing. The package is for three years and as per government claims, it has considerably increased the electricity consumption in the country.

 

 

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