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Circular debt jumps by 106.39pc despite 40.27pc hike in power tariff: NA body
The Power Division on Monday conceded that electricity rates had been increased by over 40 per cent and yet circular debt had almost doubled since July 2018, mainly because of insufficient subsidy payments.
Testifying before the National Assembly’s Standing Committee on Power, Additional Secretary of the Power Division Waseem Mukhtar said the base electricity tariff, which stood at Rs11.72 per unit in June 2018, is now Rs16.44, showing an increase of Rs4.72 per unit.
Another Additional Secretary Dr Musaddiq Ahmed Khan also confirmed that some incidents of partial overbilling had actually occurred in some distribution companies (Discos) because of extended meter-reading cycles on Eid and Ashura holidays, saying he would not defend such an exercise.
The standing committee’s meeting was presided over by MNA Chaudhry Salik Hussain and attended by MNAs Sher Akbar Khan, Ghulam Bibi Bharwana, Saifur Rehman, Lal Chand, Sabir Hussain Kaimkhani, Saira Bano, Mian Riaz Hussain Pirzada, Zahid Akram Durrani and Syed Agha Rafiullah, besides a team of the Power Division led by Secretary Ali Reza Bhutta.
The issue of overbilling was raised by Agha Rafiullah from Karachi. He said the consumers in the city had been overcharged by K-Electric through delayed meter reading, resulting in a number of days going beyond 30 or 31 days a month.
Some other members also talked about similar practices in state-owned Discos as well and said it was a matter of serious concern and required an in-depth probe.
National Electric Power Regulatory Authority (Nepra) vice chairman Rafique Ahmad Shaikh told the committee that the regulator had directed KE and other Discos to submit detailed reports, but the regulator had not received any complaint from consumers.
Dr Mussadiq said a detailed report had been received and he would not hesitate to confirm that episodes of over-reading because of higher number of days had actually taken place on a limited scale due to holidays. For example, he said, Lahore Electric Supply Company had a total of 46 meter-reading batches and in six batches reading was taken after 31 days.
Agha Rafiullah said it was a negligence on the part of Nepra which had become a ‘white element’ as billions of rupees of burden had been passed on to the consumers.
He was joined by other members in demanding that these overbillings should be reversed and common people should not be burdened because of limitation of companies or those responsible for overseeing them.
The Nepra vice chairman, however, said the regulator’s technical adviser had sought complete reports from all Discos as well as KE. He said the adviser was examining the reports on the basis of which Nepra would hold an open public hearing for all Discos and KE.
The standing committee was informed by Additional Secretary Waseem Mukhtar that electricity tariff was increased by Rs1.95 per unit in February, out of Rs3.34 per unit determined by the regulator. He said the government did not pass on the remaining Rs1.39 per unit increase to the consumers and it was also a political decision as to when the government decides to shift this burden to the consumers.
The NA committee took up the issue of circular debt and expressed concern that it had doubled despite regular increase in electricity prices.
In a report shared with the committee, the power ministry said circular debt had reached Rs2.324 trillion by July this year, mainly due to unpaid government subsidies which led to accumulation of debt on distribution companies.
Additional Secretary Mukhtar said the independent power producers (IPPs) had an overdue amount of Rs1.3tr.
Salik Hussain, the committee’s chairman, observed that the IPPs had been manipulating and maneuvering the tariff for a good enough time, but it was high time that their agreements were renegotiated and consumers given relief in electric bills.
The committee noted that the resolution of circular debt was necessary to ease supply constraints but the task was no doubt challenging since it required the outstanding stock of circular debt to be cleared before plugging further build-up of circular debt receivables.
The committee members suggested that recovery may be done through the revenue department and incentives should be given on recoveries.
The committee also appointed a subcommittee comprising Lal Chand MNA as convener and Syed Ghulam Mustafa Shah, Sabir Hussain Kaim Khani and Saira Bano as members to discuss and make recommendations for resolving the issues faced by the legislators with respect to KE, Discos and generation companies in Sindh.
Published in Dawn, September 21st, 2021
nation.com.pk
The Power Division on Monday conceded that electricity rates had been increased by over 40 per cent and yet circular debt had almost doubled since July 2018, mainly because of insufficient subsidy payments.
Testifying before the National Assembly’s Standing Committee on Power, Additional Secretary of the Power Division Waseem Mukhtar said the base electricity tariff, which stood at Rs11.72 per unit in June 2018, is now Rs16.44, showing an increase of Rs4.72 per unit.
Another Additional Secretary Dr Musaddiq Ahmed Khan also confirmed that some incidents of partial overbilling had actually occurred in some distribution companies (Discos) because of extended meter-reading cycles on Eid and Ashura holidays, saying he would not defend such an exercise.
The standing committee’s meeting was presided over by MNA Chaudhry Salik Hussain and attended by MNAs Sher Akbar Khan, Ghulam Bibi Bharwana, Saifur Rehman, Lal Chand, Sabir Hussain Kaimkhani, Saira Bano, Mian Riaz Hussain Pirzada, Zahid Akram Durrani and Syed Agha Rafiullah, besides a team of the Power Division led by Secretary Ali Reza Bhutta.
The issue of overbilling was raised by Agha Rafiullah from Karachi. He said the consumers in the city had been overcharged by K-Electric through delayed meter reading, resulting in a number of days going beyond 30 or 31 days a month.
Some other members also talked about similar practices in state-owned Discos as well and said it was a matter of serious concern and required an in-depth probe.
National Electric Power Regulatory Authority (Nepra) vice chairman Rafique Ahmad Shaikh told the committee that the regulator had directed KE and other Discos to submit detailed reports, but the regulator had not received any complaint from consumers.
Dr Mussadiq said a detailed report had been received and he would not hesitate to confirm that episodes of over-reading because of higher number of days had actually taken place on a limited scale due to holidays. For example, he said, Lahore Electric Supply Company had a total of 46 meter-reading batches and in six batches reading was taken after 31 days.
Agha Rafiullah said it was a negligence on the part of Nepra which had become a ‘white element’ as billions of rupees of burden had been passed on to the consumers.
He was joined by other members in demanding that these overbillings should be reversed and common people should not be burdened because of limitation of companies or those responsible for overseeing them.
The Nepra vice chairman, however, said the regulator’s technical adviser had sought complete reports from all Discos as well as KE. He said the adviser was examining the reports on the basis of which Nepra would hold an open public hearing for all Discos and KE.
The standing committee was informed by Additional Secretary Waseem Mukhtar that electricity tariff was increased by Rs1.95 per unit in February, out of Rs3.34 per unit determined by the regulator. He said the government did not pass on the remaining Rs1.39 per unit increase to the consumers and it was also a political decision as to when the government decides to shift this burden to the consumers.
The NA committee took up the issue of circular debt and expressed concern that it had doubled despite regular increase in electricity prices.
In a report shared with the committee, the power ministry said circular debt had reached Rs2.324 trillion by July this year, mainly due to unpaid government subsidies which led to accumulation of debt on distribution companies.
Additional Secretary Mukhtar said the independent power producers (IPPs) had an overdue amount of Rs1.3tr.
Salik Hussain, the committee’s chairman, observed that the IPPs had been manipulating and maneuvering the tariff for a good enough time, but it was high time that their agreements were renegotiated and consumers given relief in electric bills.
The committee noted that the resolution of circular debt was necessary to ease supply constraints but the task was no doubt challenging since it required the outstanding stock of circular debt to be cleared before plugging further build-up of circular debt receivables.
The committee members suggested that recovery may be done through the revenue department and incentives should be given on recoveries.
The committee also appointed a subcommittee comprising Lal Chand MNA as convener and Syed Ghulam Mustafa Shah, Sabir Hussain Kaim Khani and Saira Bano as members to discuss and make recommendations for resolving the issues faced by the legislators with respect to KE, Discos and generation companies in Sindh.
Published in Dawn, September 21st, 2021
Circular debt jumps by 106.39pc despite 40.27pc hike in power tariff: NA body
Agreements should be re-negotiated with IPPs and consumers should be given relief in electric bills ISLAMABAD - The NA Standing Committee
