Uneven approach: Power policy

Updated Jul 24, 2013 07:09am

THE new power policy carries an uneven promise of change. It is comprehensive in that it touches on almost every aspect of the power sector. But its hand is light in some places and heavy in others. For instance, in the matter of recovering outstanding bills the new policy is quite heavy-handed. Government defaulters, like the provincial governments, will find themselves dealing with a “federal adjuster” who will be empowered to deduct their outstanding amounts from federal transfers. Defaulters in the private sector will face disconnection after 60 days of non- payment, and reconnection to the grid will only be allowed with pre-paid meters after that. Ominously, the policy also makes reference to “[e]xternal collection agencies” that may be used to “improve cash flows”. Meanwhile, the policy of making high-loss areas bear a heavier burden of loadshedding will now become a national policy, where until now it was being seen only in Karachi.

But important ambiguities remain. For instance, the old suggestion of creating an energy ministry has obviously been debated by the working group, but the proposal has been defeated. Instead, there will be an “official coordination council” which will liaise between the ministries of water & power, petroleum and finance, and the Planning Commission. The powers of the council are ill-defined — to “ensure information integration” and “assist in policy formulation” — and its role is likely to be a marginal one. Coordination in the power sector will depend — now as before — on the degree of personal rapport that the various ministers can develop with each other. For institutional reform, the policy mentions reforming Nepra and Ogra “to improve efficiencies”, a far cry from the strengthened and autonomous regulators that many have been calling for.

The policy focuses on trying to wring more out of the present state of affairs rather than reforming the architecture of the power sector as a whole. It talks about providing white-glove treatment to new investors through “key client managers” and time-of-day metering and efficiency standards for electronic appliances. It aims to build a merit order in fuel allocations by providing fuel on priority to more efficient plants (ie the independent power producers) and says that conservation strategies like the early closure of shops “may be considered”. But for all its impressive scope, the actions outlined in the document are likely to fizzle out faster than the planners think because ultimately it is the same power bureaucracy embedded in the same institutional configuration that will be responsible for its implementation.

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Comments (2) Closed

Jul 24, 2013 10:18am

Structural reforms are required for Pakistan's energy sector for it perform upto its potential. Privatize the energy sector and let goverment to only create a relatively efficient energy market which consist of either vertically integrated few large players or number of small players at retail level.

Jul 24, 2013 06:32pm

No policy is heavy-handed enough for the habitual defaulters mind you. I hope that it is strict in its implementation too.