Power companies join together seeking fixed charges from net-metering users

ISLAMABAD: On the matter of imposing fixed charges on net-metering customers, two more power companies have submitted applications to the National Electric Power Regulatory Authority (NEPRA) to receive fixed charges from the net-metering customers, ARY News reported.

According to the details, after Peshawar Electric Supply Company (PESCO) and Multan Electric Power Company (MEPCO), Hyderabad Electric Supply Company (HESCO) and Sukkur Electric Power Company (SEPCO) have submitted applications to receive the fixed charges from the net-metering customers.

The SEPCO, in its application, noted that the net-metering customers rely on the national grid when the backup supply or solar generation is low; on the other hand, they don’t pay the cost of grid maintenance.

The power company continued that non-solar customers were paying more fixed cost owing to the cross-subsidization.

Furthermore, a rise in the net-metering customers is impacting the SEPCO’s revenue. SEPCO demanded in its application to impose Rs 7,000 as a fixed charge on customers using 7 kW of power.

It also suggested imposing Rs 1 per kWh on the net-metering customers.

However, NEPRA has expressed its astonishment over the application demanding Rs 1,000 fixed charges per kW.

NEPRA has called a working on charging Rs 1,000 in fixed charges per kW, whereas it also directed the SEPCO to provide details of dues on net-metering customers.

HESCO also has submitted an application to receive fixed charges while it also has given two suggestions to NEPRA regarding the fixed charges.

Under the first suggestion, HESCO suggested to impose fixed network usage charges on net-metering customers.

It has suggested to recover network charges from the customer’s load or exported units.

Moreover, HESCO also has given a suggestion of a gross metering framework to end cross-subsidy.

Earlier, the Nepra is working over a major revision to the solar net metering rates by reducing the buyback rate from Rs. 23 per unit to proposed Rs. 10, sources at the Power Division said.

In the next phase it will also be considered to erase the buyback rates mechanism and the consumer will be paid nothing for the solar power from the system, according to sources. “The consumers who generate solar power will be bound to use 100% electricity.”

Sources said that the consumers, who generate solar power, being paid Rs. 125 billion rupees

It follows concerns that the current policy is pushing up electricity costs for consumers on the grid. Officials say the financial strain has grown sharply as rooftop solar installations surge across the country.

“Payments to the IPPs becoming difficult for the government and the solar system changing into an alternate of the Independent Power Producers (IPPs)”, sources added.

The power consumption in the grid going down, in FY2024 alone, grid sales fell by 3.2 billion units, resulting in Rs. 101 billion revenue loss to power distribution companies.

This gap translated into a tariff increase of nearly Rs. 1 per unit for traditional electricity users.

Power Division projections show the impact widening rapidly over the next decade.

The situation has triggered intervention from the prime minister, who on October 22 directed the Power Division and Nepra to re-evaluate the buyback tariff and its broader impact before announcing any reforms.