ISLAMABAD: The federal government is facing stiff resistance from the National Assembly Standing Committee on Power on amendments in the NEPRA Act which give “unchecked” powers to the government to impose surcharges on electricity consumers in accordance with an agreement with the IMF.
Chaudhry Salik Hussain chaired a meeting of the Standing Committee, which has already held a few meetings on this issue but the committee remained unsatisfied with the “justifications” provided by the Power Division.
Power Secretary Ali Raza Bhutta said that there is a uniform tariff policy across the country, that the federal government would make changes in tariff policy only with the approval of the Council of Common Interests (CCI) and that policy-making is the prerogative of the CCI. He further stated that the current law on tariff needs some clarifications which the government is making and is also determining the terms of Nepra decisions.
"If the government should impose a surcharge, it should have the power to do so in the policy and the power to impose surcharges in two terms," he stated adding that the government would be able to impose a surcharge for public sector power projects only.
The Chairman Committee raised the question of whether the government would be able to impose surcharges like late payment surcharge to recover cost of incompetence and inefficiency from consumers.
Committee member Shazia Marri expressed her serious concern over the absence of law secretary from the meeting of parliamentary body. She also opposed the imposition of surcharge.
“We are scared of the word surcharge," Ghulam Bibi Bharwana commented, adding that she is not in favour of surcharge at all.
Everyone in the committee agrees that the amendment of surcharge will be misused, said the chairman of the committee.
Secretary power said the circular debt was more than Rs 2.3 trillion and the government did not impose a surcharge more than 10% of the unit price.
The government is charging Rs 1.40 per unit surcharge based on the current electricity price. Those who use 100 units will have to pay an additional Rs 140 on account of surcharge. However, the secretary said that the government would not charge poor customers.
The government is also considering increasing the number of units from 50 to 100 for lifeline consumers. Those who do not have money for household rations are sold such expensive electricity, Shazia Marri observed.
The Secretary Power said this is not a lucrative business for the government.
The Secretary Finance said that the government had imposed a surcharge to build Neelam Jhelum project. In the last 12 years, he said, the government collected Rs. 62 billion from the consumers through Neelam Jhelum project. To date, the government has imposed only Neelam Jhelum Surcharge (NJS) and the ECC had approved revocation of the Neelam Jhelum Surcharge from next month. He said that Rs 3 billion of NJS will be returned to consumers in the next bills.
The Secretary Power failed to convince the Power Committee to impose a surcharge.
“We are not hiding anything from the committee,” the Secretary Finance said, adding that if circular debt is eliminated, it will be beneficial and surcharge will improve recovery. He added that country's debt was not stable and that the finance ministry had proposed to pass on full increase to consumers due to country’s debt but this was not approved.
The Power Division informed the committee that Inquiry Committee had held officials working on Guddu Power Station responsible for the countrywide blackout.
The Secretary Power, Ali Raza Bhatta, said Power Division had received three reports in this regard and it would send these to the federal cabinet.
Bhutta further said that they would brief the committee on blackout it in the country in the next meeting, adding that the problem occurred due to ‘human error’ in Guddu power station that led to the tripping in the rest of the country’s power system. The Secretary said that the work on Guddu power station was going on but the officials did not follow SOPs during maintenance work. Due to a mistake, the Guddu power plant tripped and there was a complete blackout, while at the time of the blackout, the power consumption in the country stood at 10,000 megawatts.
Apart from the management, Inquiry committees had also nominated those responsible for not improving the NTDC system.
The management had not taken actions required to improve the system of the NTDC.
He said that inquiry committees had made underscored the need for taking measures to avoid the failure of one plant tripping the entire system in future.
Briefing the committee, K Electric officials said that losses in the city dropped from 36% to 19%. They said that 75% of sites were load-shedding free.
Soon the city will be 95% load-shedding free, KE officials said, adding that 900-megawatt units will be operational in May.
According to an official statement, The Standing Committee on Power which met under the Chairmanship of Chaudhry Salik Hussain, MNA deliberated on the Bill "The regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Bill, 2020". The Committee had sought answers from the Ministry on the clauses relating to the imposition of surcharge and opined that there is ambiguity in the collection of surcharges by the Discos and by the federal government. Salik Hussain and Members said that cross-subsidy be eliminated and each Disco should have its own tariff based on its cost structure and Aggregate Tariff Cost (ATC) loss level. The Chairman observed that if the Ministry is to impose surcharge it should only be for existing stock of circular debt and it may be levied as a flat kwh/hr across all Discos and consumers and not for some specific DISCO. For the surcharge, the Government of Pakistan should explicitly narrate the various purposes and the inefficiency of the
Discos should not be passed on to consumers in the form of surcharge. The Ministry should in clear-cut terms state how it intends to segregate the future periodic tariff increases, determined by Nepra from time to time.
The Ministry was also asked to brief the Committee on the "Circular Debt Management Plan".
The Chairman contended that as people’s representative, he is interested to know the impact of the bill on the masses. The bill was deferred for the next scheduled meeting with the direction to give rationale/justification for the imposition of surcharge through a legislation.
The Committee gave its nod of approval to the budgetary proposals amounting to Rs. 143.13 billion relating to Public Sector Development programme (PSDP) for financial year 2021-22, of the Ministry of Energy (Power Division).
The Committee appointed a Sub-Committee with the following ToRs and Composition: (i) to discuss and recommend for resolving the issues faced by the Legislators with respect to Karachi Electric Company (KE) and different Discos of Sindh", (i) Lal Chand, MNA, Convener; (ii) Syed Ghulam Mustafa Shah, MNA Member; (iii) Saira Bana, MNA and; (iv) Engr. Sabir Hussain Kaim Khani, MNA Member.
Besides the Minister Omer Ayub Khan, the meeting was attended by MNA's Sher Akbar Khan, Ghulam Bibi Bharwana, Saif Ur Rehman, Lal Chand, Engr. Sabir Hussain Kaim Khani, Muhammad Israr Tareen, Saira Bano, Mian Riaz Hussain Pirzada, Shazia Marri, Secretary, Ministry of Power Division and senior officers of the relevant departments.
Unofficially, the government informed the Committee Chairman that it would imposed surcharge of 10 per cent of base tariff which Rs 14.85 per unit, which implies that the government would impose surcharge of Rs 1.48 per unit if the amendment is cleared by the Committee.
Copyright Business Recorder, 2021