Government reviewing power tariff system


ISLAMABAD: The federal government is having second thoughts on the differential tariff regime, one of the key ingredients of the proposed power sector reforms, as their implementation may raise issues that some regional parties might try to exploit.
The government had sought legal advice whether a national level regulatory body could notify different tariff for countrywide implementation, official sources said. They said under the proposed power sector reforms, the government planned to enforce differential tariff regime for power distribution companies (DISCOs) as against the prevalent system of a unified tariff regime.
If differential power tariff is implemented then electricity will be cheaper in Punjab compared to the power producing province of Khyber Pakhtunkhwa, and Sindh, which provides gas for power generation. A low power tariff will be cashed by Punjab as evidence of their efficiency and will be a ground to demand a decrease in the share of load shedding, sources said, adding that a higher tariff in Khyber Pakhtunkhwa, Sindh and Balochistan would help the clamour of nationalist parties.
Provincial authorities are of the view that tariff is determined for a project and applied in nearby jurisdiction and if electricity is being supplied to some other province, then a different tariff should apply. In the current system, provinces have their own bodies that determine and notify tariffs, while the national body guides and synchronises the regulatory mechanism among the provinces.
Water and Power Minister Raja Pervaiz Ashraf has already announced a plan to give autonomy to four financially feasible power distribution companies in the regions of Lahore, Faisalabad, Gujranwala and Islamabad during this year. The line losses of these DISCOs are significantly lower when compared to massive line losses of 35 percent and above of DISCOs in Karachi, Hyderabad and Peshawar.
But the nationalist parties may demand that being power producers, they should be given subsidised power and Punjab being a net buyer, should pay more for the power.