Govt hints at cutting tariff for solar net metering

Published February 21, 2024
THE government moved to significantly reduce net metering tariff for homeowners in 2022, but had to step back after public hue and cry over the changing of government policies.—Photo courtesy SkyElectric
THE government moved to significantly reduce net metering tariff for homeowners in 2022, but had to step back after public hue and cry over the changing of government policies.—Photo courtesy SkyElectric

ISLAMABAD: Conceding excessive fuel cost adjustments as unfair to the consumers, the government on Tuesday hinted at fresh plans to lower net metering tariff for rooftop solar power units after similar botched attempts more than a year ago.

This was the crux of a meeting of the Senate Standing Committee on Power, which also decided to wind up investigations into alleged malpractices in the award of four contracts for a foreign-funded 765-kilovolt transmission line from Dasu Hydropower Project to Islamabad based on an inquiry of the power division giving clean chit to its subordinate company.

“There have been some excesses in fuel cost adjustments recently, but this is not our doing,” Power Secretary Asad Rehman Gilani said while testifying before the Senate panel led by Senator Azam Nazeer Tarar. Mr Gilani said the fuel costs were higher than the approved reference fuel tariff estimated in July, but this was because of higher insurance costs and tanker charges because of the situation in the Middle East.

He said the government’s hands were tied because of the “automaticity factor” committed to with the International Monetary Fund (IMF), which meant the fuel cost reached the consumer with a two-month lag. He hoped the monthly fuel cost adjustments increases would be “a little lower” in summer as heating demand in Europe eased.

Senate panel clears transmission line for Dasu Hydropower Project of corruption, mala fide allegations

Interestingly, as he gave the statement before the parliamentary panel, the power regulator published data filed by distribution companies seeking over Rs7 per unit higher FCA for January (96pc higher than the reference cost).

Both Mr Gilani and caretaker Power Minister Muhammad Ali made a pitch for lower net metering tariff to owners of rooftop solar power, saying they were “rich, well-to-do and big homeowner” urbanites capable of paying excessive power rates compared to small consumers living in five-marla or so houses.

This tariff currently stood at Rs22 per unit but would be revisited going forward, Mr Ali said in response to a worried senator who pointed out that citizens had invested in rooftop solar panels after previously encouraged by the government and suggested that many countries promoted cheaper solar electricity.

However, the minister said that there was a consideration that this tariff was on the higher side and should be brought down, adding that the country had surplus generation capacity. Secretary Gilani chipped in that this was also a matter of equity as the net metering meant poorer consumers subsidising the affluent.

Meanwhile, the Senate committee also decided to dispose of proceedings against the award of contracts in the 765 kV transmission line for the Dasu project that it had been pushing for almost two years mainly because of a change in the panel’s chairmanship.

Senator Saifullah Abro of PTI, who had been leading the inquiry, was replaced with PML-N’s Azam Nazeer Tarar. Mr Tarar believed the Senate panel should not offer its shoulders to competing contractors beyond a certain level when matters had been examined by high courts, internal grievance settlement mechanism of the government and the highest inspection forums of the World Bank.

This pertained to the award of contracts to the companies Sinohydro Corporation for LoT-I and Harbin Electric International for LoT-II, and consultant GOPA Intec of Germany for building a 765 kV double-circuit transmission line from Dasu Hydro Power Station to Islamabad and ADB project ACSR Bunting Conductor LoT-11.

Published in Dawn, February 21st, 2024

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