PTCL asks Nepra to include telecom sector in industrial category
Islamabad-Pakistan Telecommunication Company Limited (PTCL) has requested National Power Regulatory Authority (NAPRA) to revise its tariff from commercial to industrial category as it has considerably increased the electricity bills of the company exchanges across Pakistan.
In its petition submitted to NEPRA, Pakistan Telecommunication Company Limited (PTCL) has said that company is facing great financial implications due to the increased electricity bills and because of heavy loss the company is forced to close approximately 10 exchanges every month.
Telecommunication sector was declared as “Industry” by the Ministry of industries and Production, Government of Pakistan dated 20-4-2004. PTCL, therefore, was entitled to benefit all the concessions available to “Industry” including industrial tariff of electricity for its exchanges and other installations, said PTCL in its tariff petition for revision of tariff from commercial to industrial category.
The existing tariff of PTCL connections was industrial tariff, B-1, and B-2 up to November, 2001, then the Ministry of Water and Power, on August 08, 2001 revised the tariff A-2(a) up to 20 kW and A-2(b) above 20 kW separately. The schedule of tariff was revised, and a new tariff A-2(c) was approved by NEPRA w.e.f. September 03, 2007 which was applicable to all commercial connections exceeding 20 kW load (two-part tariff). The schedule of tariff was further revised dated September 26, 2008 and a new tariff A-2(C) was approved by NEPRA which was applicable to all commercial connections exceeding 5 kW load.
Two-part tariff levied above 5 kW instead of above 20 kW, the petition said. As per two-part tariff, fixed charges and low power factory penalty were charged in the monthly electricity bills of all commercial connections having load 5 kW and above.
Through Finance 2021, an amendment is made in section 2(29C) of the Income Tax Ordinance, 2001 and new clause “c” is inserted which declares Telecom Sector as an industrial.
It is submitted that PTCL has 19 regions across Pakistan and the company is consumer of all DISCOS and is paying heavy amount of electricity bills. The company has 7,823 connections and consumes 17 million units with the total bill payment of Rs339.84 million.
Due to the reduction of load limit of A-2(b) tariff, the grievances of PTCL substantially increased as the bills of exchanges and other connections have gone up by 40 percent and the major factor of increase of bills has been the impact of fixed charges and low power factor penalties. There are 75 percent telephone exchanges installed in the rural areas of Pakistan with small switching arrangement as per villagers’ demand.
The sanctioned/connected load of these connections fall between 5 kW to 40 kW and the running load of these exchanges is a maximum of 10 kW. In many cases, the sanctioned loads of these connections do not even reflect the actual load of this small load, especially in winter season. Sometime MDI recorded 3-4 times higher than the sanctioned load or deliberately wrong reading by the reading staff of DISCOS. Also, no inactive power is recorded as there is no motive load; therefore, range of power factor is already up to 1.0 percent. PFI equipment’s have already been provided on each site. In comparison of revenue received, these exchanges are now facing great financial implications due to the increased electricity bills with the impact of fixed charges and LPF. Due to heavy loss in revenue, PTCL is forced to close approximately 10 exchanges every month.
NEPRA is humbly requested that Pakistan Telecommunication Company Limited (PTCL) may please be declared as industry and approval may kindly be accorded for revision of tariff from commercial to industrial tariff as per sanctioned load of each connection, the petition maintained. NEPRA will conduct hearing on PTCL’s petition on March 30, 2022.