The Planning Commissions of Pakistan has made a number of recommendations as part of national plan for the provision of electricity , which if implemented by the PML-N government, could ease the energy crisis facing the country.
According to details, PC has recommended that tariff collection be made a priority and a new anti-theft law be legislated in this regard which prescribes severe penalties for violators.
“We will recommend outsourcing of high loss feeders for tariff collection, introducing pre-paid smart metres, promulgate anti-theft law, adjust electricity bills of provinces/defense installations at source with federal government and assign priority of supplies to Discos with lower load shedding in areas with improved collection and lower losses,” a senior official told local media on Sunday.
However, the official said that the PC would also recommend revision in tariff regime by rationalising domestic sector tariff. It asked the government to increase lifeline slab to 100 Kwh/month/consumer and remove minimum charge of Rs75 per month with a direct subsidy mechanism.
“The PC also asked the government to increase power tariffs beyond 100 Kwh per month and introduce an industrial tariff category with 50 percent premium for guaranteed uninterrupted supply,” said the official.
He emphasized the need to devise a mechanism for recovery to deal with the costs incurred outside NEPRA domain such as fuel adjustment, interest for late payments and GST. Dwelling upon major issues, the official said that for overall power sector, the average base applicable tariff stood at Rs9/Kwh which is 66 percent below the recovery cost as determined by NEPRA. An additional amount of over Rs2 per Kwh is being charged as Fuel Adjustment Surcharge (FAS) which is actually not being recovered.
“If increased fuel costs are merged into the base tariff, the estimated average NEPRA-determined tariff increases to Rs16 per Kwh. Without a matching increase in notified tariffs, the difference between the applicable and cost recovery tariff increases to over 75 percent,” said the official.
To remove bottlenecks of supply efficiencies, the PC is of the view that Pakistan’s power tariff could not go up perpetually, eroding both affordability and competitiveness by industry and businesses.
The power costs increased owing to a gradual shift from hydel to thermal as share of hydel has fallen from 70 percent in the 80s to 30 percent and now the recent shift from natural gas to furnace oil has further deteriorated the situation and put pressure in terms of cost escalation for power generation.
There is a need to achieve substantial reduction in generation cost by minimising furnace oil-based generation in the short to medium term, moving to hydel and coal for base load power over the medium to long term, reducing the rapidly increasing cost of furnace oil based generation by converting steam fired plants to coal, ensuring least cost generation mix as part of investment and operational planning for the power sector and implement LNG import project on an urgent basis.
To enhance generation capacity, the PC recommended implementation on capacity addition envisaged in the draft 10th Five Year Development Framework. This includes generating 11,000 MW by investing $21 billion, of which $8 billion comes from the private sector, to generate 5,400 MW electricity.