NA panel approves NEPRA Amendment Bill

Gives govt full powers to impose surcharges on power consumers

ISLAMABAD:

A parliamentary panel on Thursday approved the National Electric Power Regulatory Authority (Nepra) Amendment Bill 2020 to give sweeping powers to the government for imposing surcharges on power consumers to recover the cost of electricity theft and inefficiency of power distribution companies.

Power consumers are currently paying three types of surcharges, which include the tariff rationalisation surcharge, financial cost surcharge and Neelum-Jhelum surcharge in addition to heavy taxes. According to the Power Division, the government will be able to impose surcharges on power consumers, which will amount to 10% of the electricity cost.

The National Assembly Standing Committee on Power, chaired by MNA Chaudhry Salik Hussain, voted on the bill with five members in favour and four against.

Power Division Secretary Ali Raza Bhutta said that Nepra had sought powers to impose surcharges on consumers by amending the Nepra Act.

He said that the surcharges would be used to pay for electricity purchases. “Maximum surcharges will be levied up to 10% of the electricity cost to achieve the required revenue,” said Bhutta. Speaking on the occasion, MNA Shazia Marri said that power consumers were already facing a heavy burden. “I do not agree with such surcharges,” she said, adding that consumers should not be punished due to weaknesses in the power sector.

Energy Minister Omar Ayub said that proceeds from the surcharges would also be spent on power projects. “These surcharges will be levied only if approved by the federal cabinet,” he said.

Meanwhile, committee member Syed Ghulam Mustafa Shah questioned the need for more surcharges as the electricity was already expensive.

“Why don’t you speak directly? Imposition of surcharges is a condition of the International Monetary Fund (IMF),” remarked Saira Bano, another member of the committee.

MNA Amir Dogar said that maximum surcharges would be up to Rs1.40 per unit, adding that electricity was already very expensive. Finance Secretary Kamran Afzal said that the government had shared its reform programme with the IMF, adding that there would be no surcharges on small power consumers.

He said that circular debt had reached the Rs2.3-trillion mark. “If we do not resolve these issues today, the economy will sink tomorrow,” he said. Ayub said that the country needed to move from oil to cheap sources for power generation. He blamed previous governments for expensive electricity generation.

Published in The Express Tribune, March 12^th, 2021.

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