Loss in recovery of electricity bills surges to Rs208 bn

By Khalid Mustafa
November 10, 2017

ISLAMABAD: The performance of the electric power distribution companies
(Discos) have deteriorated in terms of recovery of electricity bills from the consumers as the gap between purchasing power and recovery of the electricity bills has swelled to more than Rs208 billion, reveals an official document.

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In 2015, the gap stood at Rs105 billion that reduced manifold to Rs42 billion when Younas Dagha was the secretary of water and power but after his transfer to Commerce Ministry, the Discos are again lagging behind.

Available with The News, the latest document unfolds that during Younas Dagha’s stint as water and power secretary, the recovery had improved up to 94 percent which has now deteriorated to 85-87 percent, and the gap has surged to Rs208 billion.

The less recovery would expose the power sector to more severity in cash flow situation leading to further swelling of circular debt. The relevant official in the ministry said that the new minister for power division Awais Ahmad Laghari is in process of evaluating the output of the Gencos, Discos and NTDC and to this effect many decisions are on the cards.

The current circular debt, the officials said, stood at Rs450 billion and if the loans of the power sector and liabilities amounting to Rs400 billion parked in the government power holding company are included in it then the circular debt further goes up to Rs850 billion.

The less recovery of the billed amount will compel the government to allocate more subsidies for the power sector to pay the amounts to IPPs, PSO and refineries on time, he said. The loss in recovery would also make the government more vulnerable to pay the dues of the power houses owing to which the capacity of the power plants to produce electricity would lower despite the fact that the government has managed to additionally inject over 9,000MW of electricity so far.

The Discos have since long been demanding of Nepra that in the tariff, recovery of the electricity bills should be based on reality, and not on 100 percent recovery. Nepra has already accommodated the Discos in its determination by increasing the permissible losses up to 16.2 percent owing to which the consumers will now pay Rs162 billion per year against the electricity theft. Earlier, they were paying in the tariff Rs152 billion as the permissible losses were at 15.2 percent which has now increased up to 16.2 percent. The burden of write-offs amounting to Rs24 billion have already been transferred to the consumers.

More importantly, Nepra has already exposed the consumers to another burden in the head capacity charges of Rs115 billion in its last tariff determination. According to the electricity bills, the electricity consumers, in addition, pay five kind of taxes that include GST, sales tax, income tax, further tax, extra tax, and three surcharges that also include Neelum-Jhelum surcharge, tariff rationalisation surcharge and debt servicing surcharge.

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