New Residential Electricity Tariffs in Pakistan – what does it mean for you?

NEPRA just increased electricity tariffs across the board in Pakistan, including residential electricity tariffs for customers using more than 300 kWh per month.

I explained a few years ago how our electricity bill is calculated under the slab tariff system shown above. Check it out if you want to understand the billing system before you read further to see what has changed in NEPRA’s new announcement.

As shown, the residential electricity tariff for those consumers using 301-700 kWh of electricity in the month has increased from Rs. 16.00 to Rs. 17.60 now, plus taxes. For those consumers who used more than 700 kWh in the month, the new tariff has increased by 15% from Rs. 18.00 to Rs. 20.70. If you remember, you also get the benefit of the slab below. That is, for instance, if your bill is above 700 units, your first 700 kWh will be charged at Rs. 17.60 and then all units above that will be at Rs. 20.70. Plus tax, of course.

But things are no longer that simple. And that’s the good news for many residential customers. For many customers, their bills are going to reduce even if they are using more than 700 units per month.

This is because Time of Use (TOU) billing has been enforced by NEPRA for all consumers with sanctioned load 5kW and above. TOU billing was introduced and made mandatory by NEPRA quite a few years ago. However, in cities like Karachi, it has not been enforced. Till now.

Clause XXXII of the new decision from NEPRA forces K-Electric to start providing TOU billing immediately for all consumers with sanctioned load of 5kW and above. Peak Time is from 6:30pm to 10:30pm from April to October, and 6pm to 10pm from November to March. The remaining 20 hours of the day are considered off-peak times.

That means all customers with sanctioned load 5kW and above will pay Rs. 20.70 per kWh only from 6:30pm to 10:30pm (peak time) in the summer, i.e. only 4 hours of the day. The remaining 20 hours of the day, they will pay only Rs. 14.38 per unit, no matter how many units of electricity they use in the month. Plus tax (always).

So for consumers using above 700 units per month and sanctioned load above 5kW, their average rate of electricity will work out somewhere between Rs. 15.00 – Rs. 17.00 per unit (plus tax) based on how many units they consume in peak time. Many customers may actually find their overall bill to be cheaper than it was before the price increase. They can thank TOU billing for that.

If you consume more than 700 units per month on average, and your sanctioned load is below 5kW, it may be advisable to get your sanctioned load increased to above 5kW, so you can also get the benefit of TOU billing, and hence get a cheaper average rate.

Or you can just decrease your consumption to below 700 units per month, using the tips we have provided to save energy on the SaveJoules Facebook Page without compromising on your comfort. And by comparing appliances by energy consumption before you buy them. That way you can lower your slab rates to the cheaper ones.

For consumers with sanctioned load below 5kW and consumption below 300kWh, nothing has really changed. Your rates are still the same, and you are still being subsidized by all other customers and the government.

For consumers, like me, who use less than 300kWh per month in the summer and have a sanctioned load above 5kW (since we have ACs installed, but don’t actually use them), things are going to get really expensive. My average rate is usually about Rs. 10 per kWh in the summer, and about Rs. 7 per kWh in the winter when our consumption drops to less than 200 units per month. Now my rate will jump up to Rs. 15-17 per kWh because of TOU billing that is enforced on all consumers with sanctioned loads above 5kW.

I worked hard to get my consumption down to these levels by switching to LED lights and replacing my old fridge with a new inverter refrigerator. Even got the water pump serviced to reduce it’s power draw, and am actively working on water conservation in the home to reduce the demand for the water pump.

Hmm, now I’m wondering if I should push to get our home’s sanctioned load reduced to below 5kW? I would be able to keep my electricity bill much lower, but it may restrict how much solar PV I can install on my roof in the future and sell to the grid.

On the other hand, if I run the numbers, I may find that selling solar to the grid during off-peak hours, and paying KE for peak hours will actually be more expensive than just reducing my sanctioned load to below 5kW.

What do you think?