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NEPRA Updates: Pay Electricity Bills in Installments Once a Year

Significant amendments made by The National Electric Power Regulatory Authority (NEPRA) to the Consumer Service Manual 2021 have drastically changed the way consumers across Pakistan manage electricity bills. Under the latest directives, consumers will now only have the choice to pay their electricity bills in installments once during a financial year. This new law will enhance the billing procedure to instill financial discipline among consumers and power distribution firms.

NEPRA sent out its new guidelines nationwide, including to K-Electric, one of Pakistan’s largest electricity providers. This move aims to standardize customer payment handling and address long-standing issues related to billing practices and financial management within this sector.

One important aspect of the amendment concerns the treatment of markup on installment payments under the revised manual. If any consumer opts to pay their electric bill on an installment basis, they will not be charged markup. They make the payment by the due date of the first installment. Otherwise, they will be liable to pay a markup at an annual rate of fourteen percent (14%). This step allows consumers the flexibility to manage their payment schedules while discouraging the accumulation of long-term debts.

Moreover, another provision added to the manual relates to an extension in the payment deadline, which the customer can request before the date according to the guidelines. Such a change reflects a greater understanding of the economic challenges faced by customers and a desire for friendlier regulation.

There are several reasons behind these amendments: First, NEPRA wants people to avoid continuous debt. So, they reduced the number of times people can divide bills into parts – once per fiscal year. That change forces them to budget or plan financially, reducing the likelihood of getting stuck in cycles that they cannot escape from. What they borrowed over time against future earnings or other assets like property held until death. But not sold due to lack of market demand. Secondly, NEPRA hopes that making the first installment free for a certain period could push individuals to settle accounts earlier, which will improve cash flow for distribution companies as well as ease administrative work associated with multiple plans.

Besides, an annual 14% markup on remaining installments acts as an incentive for customers to pay up promptly. Thereby ensuring that they do not give priority over other debts. This rate should offset expenses incurred by power utilities due to delayed payment and discourage. The accumulation of unpaid bills, which might affect the overall financial health of such entities.

Another consumer-friendly move made by NEPRA is allowing payment extensions before the due date, according to the modified manual. Such provision takes into account different financial situations among people and provides a safety net. Those who may find it difficult to pay on time because sudden events occur beyond their control. This way regulator tries to strike a balance between safeguarding the interests of various stakeholders. Including both parties involved in the transaction – supplier and customer.

NEPRA’s revision of the Consumer Service Manual 2021 is an overall attempt to improve the electricity billing system in Pakistan. With this, NEPRA aims to create a better-disciplined environment where they treat consumers with friendliness. They want to encourage timely payment of bills while considering people’s financial situations. The expected outcome is that there will be a more reliable electric distribution network that works efficiently for all parties involved, i.e., providers as well as end users.

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