The federal government Tuesday said it has to increase power tariff by Rs 2 per unit to pass on the burden of Rs 200 billion to consumers through quarterly adjustments. This was formally announced by Minister for Power, Omar Ayub Khan at a press conference. Secretary Power, Irfan Ali, Chairman Prime Minister's Task Force on Energy, Nadeem Babar and other senior officials were also present on the occasion.
The Minister tried to take credit for different steps taken or being taken for improvement in the power sector, most of which were initiated by the previous government. He said that the previous government did not pass on benefit of Rs 201 billion to consumers due to election year. Nepra has conducted the hearing and will announce determination within a couple of months. The government will stagger the increase in tariff. However, it has to be passed on to the consumers.
The Minister further stated that circular debt which currently is at Rs 607 billion after payment of Rs 200 billion obtained from Sukuk issued in favour of Islamic banks. 603 billion parked in PHPL books. He said circular debt will be further slashed to Rs 225-250 billion by December 31, 2019. The government intends to get additional financing of Rs 200 billion from the same consortium.
When a reporter challenged the claim of Minister that more than 90 per cent steps/ policy measures he has mentioned in the press conference were taken by the previous government, he said that recovery of Rs 40 billion is his achievement.
Nadeem Babar stated that the former government delayed tariff raise due to which circular debt increased by Rs 450 billion, adding that Nepra had approved increase of Rs 3.86 per unit in tariff but the incumbent government increased tariff by Rs 1.27 per unit and did not pass on to 75 percent consumers who use up to 300 units per month.
The Minister further stated that National Accountability Bureau (NAB) is already conducting an inquiry on kickbacks received in energy projects by previous administrations.
Questions were also raised on the role and influence of Chairman Prime Minister's Task Force on Energy, Nadeem Babar in the internal affairs of his Ministry and whether there was a conflict of interest to which the Minister claimed that he takes decisions of his Ministry. However, he didn't respond to a question about conflict of interest.
Omar Ayub further said that Discos will improve their service delivery and Mepco's tariff will be taken as new benchmark for differential tariff. For this purpose, Discos will be further divided and meters will be installed on transformers, which will bring electricity cost down.
In reply to a question, Omar Ayub said that load management will continue on high loss feeders in summer.
He blamed PML-N government for placing cap on renewable energy which blocked over 200 projects. We have lifted a cap on renewable energy projects and 600 MW would be added to the national grid from renewable resources in near future on fast track basis, he added.
He said that the government is also working on a new renewable energy policy which would be finalized by next month. We are targeting to increased share of renewable in our energy mix by to 20 pc by 2025 and then to 30 pc by 2030. While adding 30pc hydel sources, it would reach up to 60pc. It would reduce the power cost and also reduce our dependence on imported fuel and expenditure on its import for power generation.
He also said that on bringing automatic metering infrastructure, a task force is working. In Peshawar Electric Supply Company (Pesco), in three circles including Khyber, Bannu and DI Khan, power theft is high for which we are going to install Aerial Bundled Cables (ABC). He said that more than 20 thousand FIRs have been lodged against power thieves, 2,000 have been sent behind bars in which 450 employees were of Discos.
He said that in Balochistan, we are also working on converting 29,000 grid-based agriculture tube wells to solar power system and it would get complete in next two months. Currently, the federal and provincial governments are hugely subsidizing them, and after this conversion, these billions of rupee subsidy would be saved for other development works.
Besides, the government has also allowed that AJ&K would be provided Rs1.10/unit water use charges and it would be charged from the Islamabad Electric Supply Company (Iesco). We have also released Rs20 billion Net Hydel Profit (NHP) of KP province and would clear the remaining gradually. He said that we are also breaking some DISCOS which are low performing feeders of which high length of feeders is one of the reasons for their low performance. Some feeders having length up to 120 kilometers. So we would break them in small lengths to reduce their line losses, improve voltage and improve monitoring. This would be carried out in Pesco, Qesco, Mepco and Lesco.
The minister said Power Division is negotiating with the World Bank for a project for energy accounting, including installing meters on transformers, as to make power monitoring easy and control power losses and improve revenues. He said that there are around 860,000 transformers.
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