NA body meeting: Govt empowered to impose surcharge on power consumers

ISLAMABAD: The National Assembly’s Standing Committee on Power on Thursday approved the amendments to the Regulation of Generation, Transmission and Distribution of Electric Power Act 1997 empowering the government to impose surcharges on the power consumers to recover the cost what the power distribution companies (Discos) are piling up due to their own inefficiencies.

National Assembly’s Standing Committee on Power meeting was chaired by Ch Salik Hussain. Five members of the committee gave votes in favour of the bill whereas four members opposed it. Sher Akbar, Amir Dogar, Saif-ur-Rehman, Lal Chand Engineer and Sabir Hussain Qaimkhani voted in favour of the bill. However, Shazia Marri, Saira Bano, Ghulam Mustafa Shah and Riaz Hussain Pirzada opposed giving sweeping powers to the government to impose surcharges on the consumers.

It is worth mentioning that the power sector is being heavily taxed coupled with other surcharges. These include three types of surcharges ie tariff rationalisation surcharge, financial cost surcharge and Neelum-Jhelum surcharge.

It was one of the major conditions of the IMF and ADB to bring amendments to the Act to impose surcharges and timely notify quarterly and annual power hike tariffs. They will charge the cost of inefficiencies, technical losses, and theft and capacity charges from the consumers.

According to Power Division, the government would be able to impose surcharges on the power consumers to finance the major projects in the sector. This kind of surcharge shall not be more than 10 percent of electricity cost.

Power Secretary Ali Raza Bhutta said Nepra sought powers to impose a surcharge on power consumers by amending Nepra Act. These surcharges will be spent on electricity purchase payments. Maximum surcharges will be levied up to 10 percent of electricity cost to meet the required revenue, Bhutta said.

Shazia Marri said people are already facing a heavy burden. “I do not agree with such surcharges. Consumers should not be punished due to weaknesses of the power sector,” she said.

Federal Minister for Energy Omar Ayub said proceeds from power surcharges will also be spent on power projects. These surcharges will be levied only if approved by the federal cabinet, he added.

Syed Ghulam Mustafa Shah member Committee said why there is a need for more surcharges as the electricity is already expensive. Why don’t you speak directly? The imposition of surcharges is a condition of IMF; Saira Bano member Committee said, adding I am also a mother. “I know how expensive electricity is. I will bear the pain myself but I will put my child in air-conditioner room,” she added.

Amir Dogar member Committee said maximum surcharges will be up to Rs1.40 per unit. He added that electricity is already very expensive. Finance Secretary Kamran Afzal said there would be no surcharges on small power consumers. The circular debt had reached Rs2.3 trillion mark. If we do not resolve these issues today, the economy will sink under the burden tomorrow.

Power secretary said the government would supply 1400 MW more power from the National Grid to K-Electric in the next two years.

Committee chairman raised questions regarding new connections by IESCO. He said IESCO had not shared any plan in this connection. IESCO CEO said they had no objection to new electricity connections. He added that high court had barred giving connections to illegal societies.

He said the Supreme Court had banned electricity connections in the vicinity of Bani Gala. CDA is also an obstacle for power connections, he said. The Committee called the CDA chairman in the next meeting.