Power firms to recover unpaid bills by June

Consumers, including govt depts, owe Pepco Rs600b

Zafar Bhutta May 15, 2015
At present, government and private-sector consumers owe over Rs600 billion to the Pakistan Electric Power Company (Pepco). STOCK IMAGE

ISLAMABAD: The federal government has set a deadline for the heads of power distribution companies and asked them to recover all unpaid bills from private-sector defaulters by the end of June.

Earlier, the heads of these companies had committed to recovering all dues from the private sector by signing a memorandum of understanding (MoU) with the Ministry of Water and Power, say officials of the ministry.

At present, government and private-sector consumers owe over Rs600 billion to the Pakistan Electric Power Company (Pepco). Of these, provincial governments, federal departments, K-Electric and Azad Jammu and Kashmir have to pay Rs250 billion whereas the private sector, including long-time defaulters, has to pay Rs350 billion.

According to the MoU, the power companies have to collect all unpaid bills from running defaulters in the private sector and make a 10% recovery from the defaulters whose electricity connections have been cut off up to June this year. Apart from this, the collection of current bills will be improved up to 100%.

Payments to the Central Power Purchasing Agency (CPPA) will be made equivalent to the recoveries after deducting a distribution margin. All surplus amount will be credited to CPPA accounts.

The MoU says transmission and distribution losses will be cut to the target set by the National Electric Power Regulatory Authority (Nepra) for June-end. Nepra has set the benchmark at 12.5% but average losses of distribution companies stand at 18%.

The power companies have failed to control theft, which is the main reason for the growing losses. In an attempt to recover the losses from honest consumers who regularly pay their bills, the federal government had pressed Nepra to raise the benchmark to 15.5%, but the regulator refused.

Following Nepra’s denial, the Ministry of Water and Power issued show-cause notices to the heads of five power companies for their failure to meet the commitment to reduce losses and improve recovery of consumer bills.

According to the understanding between the government and power companies, the performance criteria will be implemented and all customer complaints will be addressed to their satisfaction.

Disciplinary action will be initiated against company officers every quarter for showing poor operational performance and having bad reputation. Rewards and incentives will also be offered to the officers on a quarterly basis for achieving best performance.

Meter reading through mobile will be implemented in one division in the first phase. Adjustment and bill correction will be rationalised and minimised to less than 0.01% of total bills.

Published in The Express Tribune, May 16th, 2015.

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