Need stressed for reducing cost of power production, ending uniform tariff policy

LAHORE: There is a need to bring the cost of production of power down in order to reduce the electricity tariff and end the uniform tariff policy across the board to make the distribution companies efficient and more responsible to manage losses in their respective territories.

These views were expressed by experts in the discussion on ‘Increase in power tariffs - impact on consumers affordability, DISCOS recoveries and circular debt’, organized by the Lahore Economic Journalists Association (LEJA).

The experts suggested appointing more professionals in Discos, increasing power generation from indigenous resources and from renewable energy. They also suggested abolishing fees of other departments from electricity bills. The consumers who played the bills regularly and those consumers who were involved in power theft should be penalized.

LEJA president Muhammad Sudhir Chaudhry opened the discussion while quoting the report of the Institute of Policy Studies (IPS) study, ‘impact of rising electricity prices on consumer’s behavior’. He said according to the report the paying power of power consumers was affected with increased tariff which resulted in substantial hit to recoveries and adversely affected the power sector circular debt.

Director Communications K-Electric Imran Rana said during the last 10 months KE conducted over 14000 kunda raids and removed over 130,000 kilograms illegally hooked kunda connections in the distribution network. According to the World Bank reports, more than 50 percent of the city was unplanned since it was challenging to provide uninterrupted power supplies to the city. The KE registered more than 750 FIRs against 74000 power theft cases of over 70 million power units’ theft and recovered more than Rs 60 million.

KE’s investment plan 2024-2030 with prospective investment of Rs 484 billion was submitted to the regulatory authority NEPRA whereby by 2030, KE has a target of having 30 percent share of generation from renewable. It will add 30 percent more customers and further reduce power outages by 30 percent.

While speaking on the occasion Chairman LESCO Board Hafiz Muhammad Noman said that the Discos implement the tariff given by the government of Pakistan through NEPRA. The government increased the power tariff under the IMF pressure, besides the capacity charges being paid to the IPPs which played a major role in tariff hike. However, the company is still getting 30,000 fresh connection applications every month since electricity is the basic need of life. Noman said that the LESCO is on the top in the ongoing power recovery campaign launched by the government of Pakistan. The LESCO has planned to establish its own police, and is requesting the Punjab government to link any of the property transactions with LESCO NOC. During the last 11 months the LESCO response time has been down to one hour from three hours.

Former Managing Director PEPCO and energy expert Tahir Basharat Cheema said Kasur was on the top in power theft in the LESCO region. He said that the amount of power theft in Kasur is over Rs 20 billion. Cheema suggested that the uniform tariff should be abolished.

CEO LESCO Shahid Haider said that LESCO registered 22683 FIRs against the power theft and recovered Rs 600 million against the demand of Rs 1.91 billion. Besides, the LESCO has taken actions against 70 employees involved in power theft while more than a dozen are already terminated from the services after proven guilty.

President Lahore Chamber of Commerce Kashif Anwar stressed the need of using the renewable resources of power generation including construction of Kalabagh Dam and indigenous solar power generation. He said Pakistan needs a charter of economy before the election so the country is put on the growth path.

He mentioned that the power theft could not be possible without the conveyance of the distribution companies’ staff so the accountability of them is crucial.

Copyright Business Recorder, 2023