LAHORE: The power regulator has refused to accept the industry’s demand to end fixed charges for the maximum demand indicator (MDI), a system for measuring the maximum amount of electrical energy required by a specific consumer during a given period.

Speaking to the business community at the Lahore Chamber of Commerce and Industry (LCCI) on Saturday, Tauseef H. Farooqi, chairman of the National Electric Power Regulatory Authority (Nepra), also revealed that the power generation licences for 65 gigawatts (or 65,000 megawatts) had been issued, but the installed capacity remained 43 GW.

“We cannot lift the MDI fixed charges which are being charged from the business community keeping in view the current account deficit that is to be met by charging according to the allocation,” Mr Farooqi said.

“The rate of energy is to be determined on the cost of production, which is already very high because we depend on the imported fuel,” he said, insisting that people had to bear expensive electricity due to the rupee’s devaluation.

Nepra chairman reveals licences for 65GW issued while installed capacity remains 43GW

The Nepra chief was responding to the LCCI members’ demand of abolishing the MDI charges over meagre allocation of load.

Business owners have described these fixed charges as unfair and argue that even if a factory remains closed and doesn’t consume power, it is still required to pay fixed charges to power distribution companies (Discos), even if it’s a seasonal business.

However, giving the example of the cold storage business, Mr Farooqi said that though it was considered a seasonal business, it ran throughout the year to meet the demand for fruits, vegetables and other perishable items.

“So, those running seasonal cold storages can disconnect their electricity connections and reconnect when needed,” he added.

Mr Farooqi said the rate at which the Discos were charging MDI charges, they were paying 10 per cent more to the Central Power Purchasing Agency-Guarantee (CPPA-G). “This is a very low price that they are charging,” he said.

He said Nepra had allowed the seasonal industry to disconnect and reconnect four times a year without any charges. On this, LCCI President Kashif Anwar said the notification of disconnection and reconnection should be issued so that business owners have some legal protection.

The Nepra chairman said a hearing would be held on the MDI issue next week, and business persons could inform the power regulator about their concerns.

“If businessmen use more than 50pc electricity, they are not charged any MDI. If one has a high sanctioned load [the load a consumer is allowed to use] but the usage is low, then they need to rethink,” he said.

He said the authority had decided that the rate of net metering would remain at Rs19.90 and not below it. “Even if it is given at Rs9, there was no loss, but since the decision has been taken, the rate will remain the same,” he said.

Mr Farooqi revealed that the authority had issued licences for 65 gigawatts (or 65,000 megawatts) of power supply while the country’s requirement was 23 GW. However, the country’s total installed capacity at present is 43 GW.

He said that 65pc of electricity was being generated using imported fuel. “But we don’t have dollars. The rupee has devalued, due to which coal has also become expensive,” he added.

He said the currency depreciation had increased power generation cost eight times and the overall input cost by 16pc, which made it impossible not to increase the tariff.

Published in Dawn, February 26th, 2023