Quarterly tariff determination under study

Power Division said on Monday that there is a proposal under consideration for quarterly tariff determination instead of doing this on annual basis to minimize volume of circular debt after a parliamentary panel stated that unbundling of power sector has led to corruption in DISCOs and consequent accumulation of circular debt. As discussion progressed in a special committee on circular debt chaired by Senator Shabli Faraz, members of the committee and chairman were unanimous that performance of power sector has gone from bad to worse after its unbundling.
Senator Attaur Rehman said, "We should go back to the previous system because existing system led to increased corruption in the power sector." He said that officials of distribution companies are facilitating theft and consequently contributing to the circular debt.
Joint Secretary Power Division Zargham Eshaq Khan disclosed that a proposal is under consideration to enforce quarterly tariff determination with the objective to minimize annual hit due to typical delay on part of regulator.
The DISCOs' accusations that circular debt piles up due to delay in tariff determination by National Elector Power Regulatory Authority (NEPRA) was rejected by Tariq Saddozai, head of regulator.
Saddozai said that DISCOs and government were responsible for delay in tariff determination for 2015-16 for the reason that; (i) DISCOs submitted tariff petitions with a delay of one year; (ii) when the tariff was determined, a review petition was filed by them; (iii) and then reconsideration case was filed by the ministry in the court.
Ministry of Water and Power and DISCOs wanted the regulator to also include theft in the tariff but under the law NEPRA cannot do so. The meeting was also told that NEPRA law allows inclusion of technical losses in the tariff. He said that there was no need for provision of subsidy in fiscal year 2017-18 because regulator on the request allowed the government to retain Rs 99 billion on account of fuel price adjustment, which were required to be passed on to the consumers using less than 300 units per month, as well as considerable amount on account of surcharges. An official of Federal Board of Revenue (FBR) stated that annually Rs 60 billion general sales tax (GST) was collected from the distribution companies from billing. The government was collecting Rs 121 billion on account of various surcharges from consumers through electricity bills, the NEPRA chief told the committee.