The Pakistan Textile Exporters Association (PTEA) has formally requested a revision of the tariff structure for industrial consumers, highlighting discrepancies between B-2, B-3, and B-4 consumer categories based on factors such as voltage level, system losses, and metering configuration.
In a letter addressed to Commerce Minister Jam Kamal and Power Minister Sardar Awais Leghari, the PTEA raised concerns about a critical anomaly in the industrial electricity tariff design, which was recently updated by the National Electric Power Regulatory Authority (NEPRA).Â
The association argued that the existing tariff system contradicts standard grid cost principles and disincentivizes industrial consumers from investing in more efficient, high-voltage grid connections.
Under the current NEPRA tariff, which took effect from July 1, 2024, off-peak variable energy charges are as follows: Rs 28.56 per kWh for B-2 consumers (400V), Rs 29.39 per kWh for B-3 consumers (11 kV), and Rs 29.11 per kWh for B-4 consumers (132 kV).Â
PTEA’s analysis points out that, based on standard cost-of-service methodology, the tariff should be lower for higher-voltage connections due to reduced distribution losses, improved system efficiency, and the avoidance of low-tension infrastructure maintenance costs.
Despite these advantages, B-3 and B-4 consumers are charged higher rates than B-2 consumers, even though they bear the full capital and operational costs of their own power systems while providing low-loss loads to the grid.Â
Additionally, there is a discrepancy in metering practices: B-2 and B-1 consumers are metered after the transformer, meaning utilities absorb transformer losses and maintenance costs, while B-3 and B-4 consumers are metered at the high-tension terminals and maintain their own downstream infrastructure.
This disparity in tariff design has led to inefficiencies within the grid. Large industries are reportedly splitting their sanctioned loads across multiple B-2 connections to avoid the higher rates of B-3/B-4, creating inefficiencies, higher technical losses, and fragmented billing.Â
PTEA has proposed several measures to address these issues, including tariff rationalization to provide a minimum Rs 2 per kWh discount for B-3 and B-4 industrial consumers compared to B-2, incorporating factors such as voltage level and metering points into the tariff structure, and introducing regulatory disincentives for industries operating multiple B-2 connections when a B-3/B-4 interconnection is feasible.
PTEA leaders argue that these changes would help reduce system losses, improve grid utilization, promote sound industrial growth, and enhance the financial performance of distribution companies (DISCOs), all without the need for additional subsidies. “This realignment will ensure a more efficient and stable energy system, benefiting both the industry and the grid,” said Khurram Mukhtar, Chairman of PTEA.
