ISLAMABAD: The Nawaz government has taken a decision under which consumers will now pay for debt servicing of the loans of inefficient Gencos and Discos that are already exposed to huge line losses, resulting in a huge increase in tariff of up to Rs5 per unit.
The startling decision has been taken in the ECC (Economic Coordination Committee) meeting held here on Wednesday with Finance Minister Senator Ishaq Dar in the chair while approving the summary of the Ministry of Water & Power.
The summary was to issue policy guidelines to Nepra (National Electric Power Regulatory Authority) to incorporate debt servicing on actual basis in revenue requirements of distribution companies, which would be adjusted in tariff of Discos on an annual basis.
The ECC also approved the summary of the Ministry of Water & Power for issuance of policy guidelines to Nepra to rationalise the T&D loss target of 12.82 percent to 15.75 percent on the same analogy as was done for tariff for the financial year 2012-13.
The Discos claim that the T&D losses remained at 17.55% for the year 2013-14. The minister for water and power informed the ECC that the government in the last one year had improved in recovery and containing the line losses up to the extent of 2% and will continue to make progress in this regard.
The decision, the official in the Ministry of Water and Power said, factually negates the Sector 31 of Nepra Act and verdict of the Supreme Court which appeared in December 2013 in which it was clearly said that no policy guideline could be issued to the regulator which directly affected the consumers who paid the electricity bills regularly. The apex court had said that losses and inefficiencies should not be passed on to consumers.
However, DG Media, Ministry of Finance, Nadeem Kiani said that it would have a zero impact on the tariff of consumers, but sources in the Ministry of Water and Power argued that the government had cleverly played by approving the policy guidelines under which debt servicing had been included in the tariff of Discos.
The sources said that Nepra, while toeing the directives of the Supreme Court, has factually reduced the line losses of Discos, which are now permissible in the tariff owing to which consumers will be having a benefit of Rs30-35 billion a year. The government has included the debt servicing component in the tariff to bridge the loss the power sector will be sustaining because of the reduction of permissible losses in the tariff by Nepra.
Nepra has reduced the permissible losses from 16.5 percent to 12.82 percent. The Nepra spokesmen, Safeer, said that in the past Nepra had disallowed the inclusion of mark-up in the tariff and if the government gives its new policy guidelines, including debt servicing component in the tariff of Discos, the authority will assess as to whether the policies are prudent and if they are found not prudent, then Nepra will reject the said policies.
To a question about the impact of the ECC decision on tariff, he said that he was right now not in a position to work out the impact on the tariff as it was the job of tariff department of the regulator.
The sources said that with the reduction in permissible losses, the tariff will be reduced by Rs3 per unit, but with inclusion of debt servicing component in the tariff of Discos under the approved policy guidelines by the ECC, the tariff will surge by up to Rs5 per unit and the government will give subsidy for Rs2 per unit and pass on Rs3 per unit to consumers to bridge the loss to be incurred on account of reduction in permissible losses.
The ECC also approved allocation of gas from Sara and Suri gas fields, located in district Ghotki, Sindh, to Genco-II at mutually agreed terms and conditions. It may be mentioned here that the gas fields remain dormant due to lack of investment.
The meeting also approved the summary of the Revenue Division for exemption from income tax to profits and gains derived by coal mining projects in Sindh supplying coal to power generation projects only.
No comments:
Post a Comment