Govt to recover deficit of Rs200b from power consumers

Power minister says entire burden will not be transferred in one go

Zafar Bhutta March 26, 2019

ISLAMABAD: The government has decided to transfer the onus of Rs200 billion on account of capacity payments to power producers which will increase the power tariff by Rs2 per unit.

The National Electric Power Tariff Regulatory Authority (Nepra) held public hearing during the ongoing month to increase tariff on account of capacity payment to the power producers which was pending for the last one-and-a-half-year, Federal Minister for Power Omar Ayub Khan said while talking to media here.

He said that the government of Pakistan Muslim League-Nawaz (PML-N) had avoided to take the unpopular decision to increase power tariff to recover Rs200 billion from the consumers on account of capacity payments which remained pending for 18 months due to elections.

However, the entire burden will not be transferred in one go, and instead, the increase will take place on quarterly basis. The first increase will be passed on to the consumers during the next two months.

It is pertinent to mention here that in October 2018, the incumbent government had passed on Rs1.27 per unit increase in electricity rates to the power consumers to recover Rs226 billion.

The delay in power tariff and electricity supply to the consumers on high loss feeders were the two main reasons for the ballooning circular debt, the minister said.

The circular debt has surpassed Rs1400 billion and currently stands at Rs1410 billion. The banks' loan stands at Rs603 billion parked into Power Holding.

He said that government had released Rs200 billion to energy companies to reduce circular debt and also planned to issue bonds to raise another Rs200 billion. The government was paying off expensive loans first and the circular debt would be reduced to Rs225 billion by December 31, 2019, the minister claimed.

He maintained that recovery of power distribution companies had increased by Rs40 billion during the last three months due to anti-theft drive.

To a question whether the government would exercise load management [load shedding] in coming summers, the minister replied that load management would be done on high loss-making feeders.

He held the PML-N government responsible for placing cap on renewable energy that blocked over 200 projects.

"We have lifted the cap on renewable energy projects and 600MWs would be added to the national grid from renewable resources in near future on fast track basis," he added.

He noted that the government was also working on a new renewable energy policy which would be finalized by next month.

"We are targeting increased share of 20 percent renewable energy by 2025 and then to 30pc 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," the minister observed.

Omar Ayub Khan informed that a task force was working for bringing the automatic metering infrastructure. He added that in Peshawar Electric Supply Company (Pesco) and three circles including Khyber, Bannu and Dera Ismail Khan, power theft was high for which Aerial Bundled Cables (ABC) would be installed.

He told that more than 20,000 FIRs had been registered against power thieves. 2000 power pilferers have been sent behind bars of which 450 were employees of Ex-Wapda distribution companies (Discos).

He said that in Balochistan, the government was working to convert 29,000 grid-based agriculture tube wells to solar power system which would be completed in the next two months. Currently, the federal and provincial governments had been hugely subsidizing them, and after the conversion, subsidy of billions of rupees would be saved for other development works.

Besides, the government has also allowed that Azad Jammu & Kashmir would be provided Rs1.10/unit water use charges and the amount would be charged from the Islamabad Electric Supply Company (Iesco).

The minister informed that Rs20 billion Net Hydel Profit (NHP) of Khyber Pakhtunkhwa province had been released and the remaining amount would be cleared gradually.

He said that some feeders having length of up to 120 kilometers would be broken in small lengths to reduce their line losses, improve voltage and monitoring. This would be carried out in Pesco, Qesco, Mepco and Lesco.

Besides, the government was negotiating with the World Bank for a project on energy accounting, including installing meters on transformers so as to make power monitoring easy and control power losses and improve revenues, the minister added.

He told that there were around 860,000 transformers.


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