ISLAMABAD, May 5: The Punjab government has decided in principle to oppose to subsidise power consumers in three other provinces where Wapda’s breakaway distribution companies are facing heavy line losses, a source told Dawn.
The federal government and the World Bank are proposing that a Universal Obligation Fund (UFO) be created to keep the power rates uniform throughout the country for at least five years even after complete unbundling of Wapda.
The Punjab has conveyed to the federal government recently that it would formally register its point of view during the talks on forthcoming national finance award and other forums when national debate on power tariff issue is launched, an official said.
All the power distribution companies are required, under the proposed scheme, to contribute in the fund through a uniform tariff rate which would be used to restrict power rates of loss making companies from going up.
The world bank’s power sector mission is starting the review of the power sector reforms from Tuesday and would hold discussions with the government and Wapda officials during the next few days on reforms status and revision in Wapda targets.
A senior official of the Punjab government said that line losses of all the five distribution companies operating in Punjab were negligible and their consumer tariff could come down when their applications for separate tariff under Wapda’s corporatization programme were approved by the National Electric Power Regulatory Authority.
On the other hand, the line losses of three Wapda companies operating in NWFP, Balochistan and Sindh were at a very high level and their tariffs could even touch Rs10 per unit which was socially unsustainable.
All the distribution companies of Wapda are required, under the power sector reforms agreed to with the World Bank, to submit their separate tariff petitions before June 30.
The official said the Punjab government was working out the total amount which consumers in that provinces would have to pay in excess of their really required tariff level but definitely it runs into billions of rupees per month.
At present the line losses of Lahore Electric Supply Company are at around 13 per cent, Gujranwala 10 per cent, Faisalabad 8.6 per cent, Multan 16.9 per cent and Islamabad Electric Supply Company 8.8 per cent.
On the other hand, Peshawar Electric Supply Company’s current losses are estimated at 33.2 per cent, Hyderabad 34.3 per cent and Quetta company at 19.2 per cent.
“What is the objective of creating separate companies when tariff is being kept uniform? Why honest consumers in Lahore and Islamabad should bear the burden of theft and mismanagement of consumers in Hyderabad, Peshawar or for that matter FATA?”. These questions, the official said, needed to be responded to by the federal government.
The official said that people were also asking as to why always Punjab is made to sacrifice either it is water shortage, resource distribution or sharing of power losses.
The government announced on April 15 to seek opinion from the general public, the provinces and other stakeholders on the question as to how separate power tariffs could be implemented in various parts of the country as the existing uniform tariff would not be sustainable once the tariffs are separated by the Nepra.
Sources said that if separate tariffs were introduced for all the distribution companies, power rates for some companies like Quetta, Hyderabad and Peshawar could go up to unbearable limits of Rs10 per unit while profitable and efficient companies like Islamabad, Faisalabad and Lahore could even drop beyond current levels.
This could be socially unsustainable because poor people in far flung areas of Balochistan would be forced to live without power and that could spark law and order problem and sense of deprivation, said a Wapda official.
To address that problem, the initial idea was to charge a fixed surcharge from the consumers of healthy distribution companies, establish a fund of universal obligation to provide electricity to all and subsidise power tariff in poor areas, he said.
The distribution companies shall submit bulk supply tariff petitions to NEPRA by June 30, while NTDC and Wapda Hydel shall do so by May 1, a policy committee meeting decided on April 15, 2003.
The power minister Aftab Ahmed Khan Sherpao had directed the meeting that social and economic implications must be kept in mind while determining the power tariff and privatization of WAPDA entities.