The Govt comes under fire for a power surcharge hike

The federal government came under fire on Thursday from officials of the National Electric Power Regulatory Authority (Nepra) and consumers over its request to increase the rate of power surcharge from the next financial year to pay off circular debt and power theft by power distribution companies.

Nepra has already allowed the government to recover Rs 1.43 per unit surcharge from power consumers from the next financial year.

However, the government, in a petition, said that this was not enough to meet requirements and requested an increase of Rs 1.80 per unit to Rs 3.23 per unit on electricity consumers from the next year to pay off debt and the cost of power theft by inefficient power companies. NEPRA Concerned Over Imposing Power Surcharge on Consumers

The federal government had requested to impose Rs 3.23 per unit surcharge on a permanent basis from the next financial year, which will result in passing on a burden of Rs 355 billion on electricity consumers across the country.

The National Electric Power Regulatory Authority (Nepra) conducted a public hearing on Thursday to consider the federal government’s petition to increase the rate of power surcharge on consumers.

The federal government submitted a new petition to Nepra relating to the hike in power surcharge from Rs 1.43 to Rs 3.23 per unit, registering an increase of Rs 1.80 per unit for the next financial year.

In the petition, the federal government said that the previously approved power surcharge could not meet the requirement to pay off circular debt.

During the hearing, Member Nepra-Khyber Pakhtunkhwa Maqsood Anwar questioned how far this matter would go and feared that the government would submit more applications to raise more surcharges again.

Chairman Nepra questioned why it was so early for next year’s power surcharge and pleaded with the federal government representatives to “let the people breathe a sigh of relief.”

The officials stated that the problems of the power sector are serious, and circular debt is increasing rapidly.

Member Sindh Rafiq Shaikh questioned why people should be punished for the poor performance of discos and lashed out at power ministry officials for requesting a further increase in power surcharges.

He called for resolving the problems of electricity companies and stated that they were also there to protect the rights of the users.

Member Balochistan Nepra, Muthar Niaz Rana, also expressed concern over the poor performance of power distribution companies and called for addressing the governance issues within the companies.

Earlier, the federal government had requested to increase the power surcharge by Rs 1.43 per unit for the next financial year.

Now, the federal government has submitted a request to increase the power surcharge to Rs 3.23 paise per unit, Nepra authorities said.

Member Punjab Nepra asked the power division official not to mislead regarding the imposition of the surcharge and requested an explanation.

Power division officials said that the circular debt stood at Rs 2600 billion, which included payments to IPPs and Power Holding Company’s debt.

Chairman Nepra stated that it is not Nepra’s job to impose this surcharge and added that the imposition of power surcharge will not resolve the issue of circular debt anymore.

He questioned if it was the right act that the ministry controlled the power sector. In the current situation, the tariff of the industrial sector will reach Rs 50 per unit, said Tanveer Bari, representative of the Karachi Chamber of Commerce and Industry, who rejected the request for a surcharge increase. Nepra will review the data and issue a decision.

Power division officials said that the government was facing problems in paying off dues to Chinese coal-fired power plants. They said that the power division had submitted a payment plan for IPPs to the Finance Division.