THE minister concerned recently tweeted the approval of the electricity package after the cabinet approved the seasonal package, according to which, any additional electricity consumed by domestic and commercial consumers from November to February, compared to the last corresponding period, will have a discount of Rs5-7 per unit. The main purpose of the incentive is to encourage maximum use of surplus power so that capacity payment to power producers may be optimised.
The government efforts in this regard are appreciated, but, for effectively utilising all the surplus capacity, the government needs to simultaneously take some other measures as well.
There should be expeditious disposal of applications for new connections. The existing distribution companies (Discos), according to the National Electric Power Regulatory Authority (Nepra) State of Industry Report 2021, had about half-a-million consumer applications for new connections pending till June 30. The granting of connections to all these domestic and commercial prospective consumers can absorb a big portion of the surplus electricity capacity.
This measure will increase the service areas of all utilities, increase their revenues, possibly reduce electricity theft, and also boost overall economic development.
The granting of new connections, according to press reports, is presently very tedious. The procedures are overburdening the applicants. There are huge delays that often lead to the alleged demand of ‘speed money’. Nepra appears unconvinced on the reasons offered by the Discos for the delays, and about the provision of new connections.
The Pakistan Institute of Development Economics (PIDE) has recently released a study on new electricity connections. The findings identified six reasons for such delays; complex procedures, excessive documentation requirements, high opportunity cost, speed money, long processing time and stress level. The Ministry of Energy, Nepra, the National Transmission and Despatch Company (NTDC) and other relevant authorities should analyse the PIDE findings and take immediate remedial measures.
It is believed that with the assistance of the National Database and Registration Authority (Nadra), the procedures, particularly the documentation part, can be streamlined for early processing of the applications for new connections.
The authorities may also consider allowing franchise for temporary connections to street vendors based on prepaid cards. There is believed to be a large demand for temporary connections of electricity. Roadside vendors, often near electricity poles, need electricity on a daily basis for lighting, fans or operation of juicers, fryers or other appliances.
Their needs are met probably by extension lines from nearby shops or houses, or they manage illegal temporary connections known as kundas.
Many vendors are expected to pay for temporary connection of electricity, provided it is made available on a legal basis. In case the electricity utilities decide to install electric meters on the poles in commercial areas, they can generate big income.The meters should have slots for connection to be available to vendors who insert prepaid cards for using the electricity facility.
The prepaid cards may be issued on the pattern of such cards issued by the telecommunication companies.
The electricity utilities can allow franchise arrangements for temporary supply in specified streets or number of poles to wholesale customers who would manage service delivery to individual vendors and protect the meters.
Muhammad Bashir Chaudhry Karachi
Published in Dawn, October 21st, 2021