This is apropos a Business Recorder editorial “Power tariffs: digging a deep hole” carried by the newspaper recently. That this comment or analysis is both timely and alarming is a fact. The situation in the power sector is indeed pathetic, to say the least.
Power regulator NEPRA’s State of Industry Report 2023 estimates that poor governance led to over PKR 530 billion loss in FY2023. T&D losses and lack of full revenue recovery in the DISCOs made up 75% this colossal loss. The remaining 25% went to out of merit-order generation due to system constraints and the penalties paid to IPPs (independent power producers) for some contractual violations.
Power sector managers, however, seem unmoved. Perhaps they hope that quick fixes and band-aids will fix the system. That is tantamount to the proverbial “situation hopeless but not serious”. There may be some reduction in sales due to the fact that consumers are tightening their belts. But end-users are switching to non-grid options like roof-top solar, which is perhaps having a more profound impact.
Your reference to the government’s honoring its Net-Metering Policy is theoretically correct but, at present, is not among the major culprits insofar as the power sector mess is concerned as the energy injected by these consumers into the grid last year was even less than half a percent of the sales of DISCOs.
Dr Shahid Rahim
Bahawalpur
Copyright Business Recorder, 2024
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