‘Govt increased average power tariff by over 40pc in 3 years’

Islamabad: The PTI government has increased the average power tariff by over 40 percent (Rs 4.72 per unit) to Rs 16.44 from Rs 11.72 per unit during the last three years.

This was disclosed by Additional Secretary Power, CEO CPPA-G, Waseem Mukhtar at a meeting of the National Assembly Standing Committee on Power, which met under the chairmanship of Ch Salik Hussain. Mukhtar informed the Committee that Nepra had determined an increase of Rs 3.34 per unit in base tariff, of which Rs 1.95 per unit was passed on to the consumers in February this year but Rs 1.39 per unit is still pending. He argued that the time to pass on the remaining determined increase of Rs 1.39 per unit is a political decision.

He also informed the Committee that the government owes Rs 1.3 trillion to Independent Power Producers (IPPs). And that energy sector circular debt stood at Rs 2.280 trillion as of June 30, 2021 but now it reached Rs 2.324 trillion as of July 31st, 2021.

Chairman Standing Committee advised the government to seek discount in tariff from the IPPs as private power generation companies have cheated the government massively. Power Division official apprised the committee that measures have been taken to reduce the flow of circular debt, adding that circular debt flow was Rs 57 billion in July 2020, which has declined to Rs 44 billion in July 2021.

The issue of over-billing in Karachi also came under discussion. Member National Assembly Agha Rafiullah stated that billions of rupees have been overcharged to electricity consumers and accused Nepra of negligence claiming it is a white elephant. Responding to Afgha Rafiullah, Vice Chairman Nepra, Rafique Ahmad Shaikh said that the regulator has already sought a report on over-billing from KE.

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“Nepra’s Advisor is investigating the issue of over-billing in Karachi Electric and other power Distribution Companies (Discos),” he said, adding Nepra will hold public hearing on this matter.

Power Division officials confirmed that partial over-billing has been noted during holidays of Eid-ul-Azha and Muharram.

Musadaq Ahmed Khan, Additional Secretary Power, stated that over-billing is a fact and added that Power Division will not defend it unreasonably.

Agha Rafiullah argued that the amount collected from consumers through over-billing will have to be returned to the relevant consumers.

He said, the state should return the over-billed amount to the affected consumers, and observed that it is the common man who is punished.

According to a press release, in a report shared with the Committee, the Ministry reported that for the fiscal year 2020-21, the debt has reached Rs2.28 trillion in the country, mainly due to the unpaid government subsidies which has resulted in the accumulation of debt on distribution companies.

Although there is an increase of 50 percent in the tariff since July, 2018 but the circular debt has doubled up. It was told that power tariffs are determined by Nepra, there is a difference in the way that tariff decisions are implemented for Power Generation Companies and end-consumers. Tariffs for power generation Companies are governed by power purchase agreement, which defined the base tariff for power generation as well as the process for subsequent adjustments. Tariffs revision is thus automatically reflected in power purchase prices. Nepra only validates the past claims of power supplier.

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Chairman of the Standing Committee Chaudhry Salik Hussain observed that it has been good enough time that the IPPs have manipulated and manoeuvred the tariffs and have blackmailed the government. It is high time, the agreements should be re-negotiated with IPPs and the consumers should be given relief in the electric bills. He said the resolution of circular debt is necessary as this will ease supply constraints. The tasks is challenging since it requires the outstanding stock of circular debt to be cleared before plugging further build-up of circular debt receivables. The Committee members suggested that recovery may be done through revenue department and incentives could be given on recoveries.

The Committee also appointed a Sub-Committee to discuss and recommend for resolving the issues faced by the legislators with respect to Karachi Electric Comply (KE), DISCOs and GENcOs of Sindh. Composition of the Committee will be as follow ;(i) Lal Chand, MNA- Convener; (ii) Syed Ghulam Mustafa Shah, MNA- member ;(iii) Engr. Sabir Hussain Kaim Khani, MNA- member ;(iv) Saira Bano, MNA- member.

The meeting was attended by MNA’s Sher Akbar Khan, Ghulam Bibi Bharwana, Saif Ur Rehman, Lal Chand, Engr Sabir Hussain Kaim Khani, Saira Bano, Mian Riaz Hussain Pirzada, Zahid Akram Durrani, Syed Agha Rafiullah, Secretary, Ministry of Power Division along with senior officers of the relevant departments attended the meeting.

Copyright Business Recorder, 2021