'High power tariff an attempt to cover Pepco incompetence'

[Naveed Yaseen]

MUSHTAQ GHUMMAN
ISLAMABAD (May 31 2009): The government of North-West Frontier Province (NWFP) has termed the current power tariff as anti-business and anti-people, and an attempt to cover the incompetence of Pakistan Electric Power Company (Pepco).

"High electricity tariffs notified by Pakistan Electric Power Company (Pepco) have not only tremendously perturbed the general public but have also affected the economic activities throughout the country," NWFP Finance Minister Humayun Khan said in a letter to the federal government and the Pepco Managing Director, a copy of which was also made available to Business Recorder.

The provincial government had written the letter at a time when the National Electric Power Regulatory Authority (Nepra) was considering new tariff petitions filed by different discos.

According to NWFP Finance Minister, inefficiency and incompetence of discos, high line losses, upward trend of oil price in the international market last year and excessive consumption of electric energy during peak load hours in the evening were the main reasons for soaring power tariffs.

THE ITEM-WISE REASONS WERE DISCUSSED AS FOLLOWS:

i. It is very pathetic that no practical steps towards reduction in administrative or technical line losses have been taken either by Pepco, Nepra, Pesco or Ministry of Water and Power. Wapda (defunct) was unbundled into discos ie small units, in order to improve its efficiency. Contrary to this, inefficiency has prevailed.

ii. In 2007-08, progressive line losses of Lesco were 12.8 percent, Gepco, 11.1 percent Fesco 11.2 percent Iesco 10.3 percent, Mepco 18.5 percent, Pesco 32.2 percent, Hesco 35.9 percent, and Qesco 20.00 percent. The NWFP government said that percentage of losses in Pesco and Hesco have been abnormal as compared to the discos in Punjab.

Since increase in tariffs is always determined by the federal government/Nepra on the basis of line losses in each disco and price of oil, thus, the federal government, the provincial governments and, by and large, the general public is affected.

"In view of special circumstances of NWFP in the wake of long lasting effects of earthquake, wheat shortage, load shedding of 16/18 hours, in-depth study of the high line losses in Pesco should have been completed by now at the level of Pepco. However, no attention is being paid to this very important issue either by any of the concerned Ministry or department," Humayun said.

He said that as oil price in the international market slumped from $167 per barrel to $50 per barrel, tariff should have been rationalised, but the ground reality was totally different. He argued that not only NWFP but the entire nation was suffering due to load shedding.

According to Nepra, solution of all problems like high power cost and load shedding is because of high consumption during peak hours as costly electricity is produced during these hours resulting in an abnormal increase in the cost. The only solution to this problem lies in the installation of Time of Use (ToU) meters.

Federal government had decided on February 24, 2007 that all sanctioned load exceeding 20 kw to existing consumers will be provided ToU meters by the company not later than June 30, 2008 but there has been no installation of such meters so far. In the report and comments on Writ Petition No 1049/2008 lodged in Islamabad High Court by Government of NWFP, the Ministry of Water and Power had made similar commitment.

Further as per revised tariffs notified by the Ministry of Water and Power on September 5, 2008, all the existing consumers having sanctioned load exceeding 5 kw are to be provided ToU metering arrangement by the company not later than June 30,, 2010.

The NWFP government has demanded of the federal government to constitute a special committee consisting of qualified and experienced staff to probe the root cause of high line losses, and recommend ways and means for reducing technical and administrative losses.

They have also urged the federal government to utilise all available sources to decrease line losses to the permissible limit to save the people of not only NWFP but the entire country from colossal financial burden of high cost of electricity.

The most important demand is that the ToU meters be installed expeditiously at all government and private connections in the country with above 5 kw load through a crash programme. Difference between peak hours and off-peak hours' tariff must be visible to persuade the general public to curtail their electricity consumption during peak hours in order to achieve the actual objective of reduction in the use of electric energy, he added.

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