Interest on loans, T&D losses: government wants to recover Rs 89 billion from consumers
The government wants to recover Rs 89 billion from the power consumers on account of interest liability of loans and higher transmission and distribution losses of Discos, it was learnt. Sources said that the policy guidelines have been issued to the regulator on two different proposals of Ministry of Water and Power, seeking incorporation of debt servicing in tariff and to allow distribution companies to claim 15.75 per cent line loess in tariff instead of 12.82 per cent.
An official of Finance Ministry said that a number of factors for the re-emergence of circular debt and mark up liability, which was not covered in tariff is one of major reasons. This account for Rs 44 billion to the circular debt and Ministry of Water and Power wanted the amount to be adjusted in tariff. On the request of Water and Power Ministry, the Economic Co-ordination Committee (ECC) of the Cabinet headed by Finance Minister Ishaq Dar has issued policy guidelines to National Electric Power Regulatory Authority (Nepra) to incorporate debt servicing on actual basis in revenue generation of distribution companies to be adjusted in their tariff. The government had procured Rs 239 billion loan from a consortium of banks to clear the liabilities of power sector.
Ministry of Water and Power has also submitted another proposal to the ECC for issuance of policy guidelines to the regulator regarding review of determination about transmission and distribution losses of Discos for the current fiscal year. The Ministry argued that 12.82 per cent losses set by regulator for 2013-14 is simply unachievable. Higher unaccounted for losses would add to the circular debt to the tune of Rs 45 billion.
Sources added that average losses of Discos were 17.55 per cent while regulator fixed their T&D losses target at 12.82 per cent for the current fiscal year. As per statistics presented before the ECC, Pesco claimed 31 per cent losses but the losses determined by Nepra in tariff were 15 per cent. The Iesco claimed 9.50 per cent losses and was allowed 9.45 per cent by the regulator, Gujranwala Electric Power Company (Gepco) claimed 11.50 per cent losses and was allowed 9.48 per cent, Lahore Electric Company (Lesco) claimed 12 per cent losses and Nepra determined 9.80 per cent, Faisalabad Electric Supply Company (Fesco) claimed 10.83 per cent and was allowed 9.10 in the tariff, Multan Electric Company Limited (Mepco) claimed 23 per cent losses and was allowed to recover 15 per cent through tariff.
Sukkur Electric Supply Company (Sepco) claimed 37 per cent losses and losses determined by Nepra in tariff were 15 per cent, the losses claimed by Quetta Electric supply Company (Qesco) were 21.05 percent and allowed 15 percent losses to recover from the consumers through tariff.