Experts Suggest Strategies to Reduce Power Tariffs and Combat Theft

In an event organized by the Lahore Economic Journalists Association (LEJA) to discuss the impact of increasing power tariffs on consumer affordability, recoveries of distribution companies (Discos), and the issue of circular debt, experts put forward various recommendations to address the challenges in Pakistan’s power sector. The key suggestions from the experts included:

  • Appointing more professionals in Discos to enhance their efficiency.
  • Increasing power generation from indigenous and renewable sources.
  • Separating financial recoveries (such as taxes and fees) from electricity bills.
  • Protecting law-abiding power consumers and penalizing power thieves.

President of LEJA, Muhammad Sudhir Ch, referred to a study conducted by the Institute of Policy Studies (IPS), highlighting how rising electricity prices have impacted the paying capacity of consumers, leading to reduced recoveries and contributing to the circular debt issue in the power sector.

Hafiz Muhammad Numan, Chairman of the Lesco Board, supported the idea that Discos should implement government-set tariffs. Despite the increased power tariff due to IMF pressure and capacity charges paid to independent power producers (IPPs), Lesco continues to receive 30,000 fresh connection applications every month. Hafiz Numan mentioned that Lesco has actively participated in the government’s power recovery campaign, reducing response times from three hours to one hour in the last 11 months.

Energy Expert Tahir Basharat Cheema emphasized the need to address power theft issues, particularly in areas like Kasur, where losses exceeded Rs 20 billion. He suggested ending the uniform tariff policy and eliminating taxes and fees, which constitute nearly 30% of consumers’ total bills. Regarding the privatization of the power sector, Cheema believed that the government’s approach to management contracts with private sector involvement is more feasible than transferring control to provincial governments.

CEO of Lesco, Shahid Haider, reported that the company had filed 22,683 First Information Reports (FIRs) against power theft, recovering Rs 600 million out of a demand of Rs 1.91 billion. Lesco also took action against 70 employees involved in power theft.

Imran Rana, Director of Communications at KE, provided insights from Karachi’s power distribution network, mentioning over 14,000 kunda raids and the removal of 130,000 kilograms of illegally connected kundas. KE had registered more than 750 FIRs against 74,000 power theft cases, recovering over Rs 60 million. The company had made significant investments since privatization, reducing transmission and distribution losses from 38% to 15.3%. He also revealed KE’s investment plan for 2024-2030, aiming to increase renewable energy generation, expand its customer base, and further reduce power outages.

Kashif Anwar, President of the Lahore Chamber of Commerce, emphasized the importance of using renewable resources for power generation and called for the construction of the Kalabagh Dam. He stressed the need for a charter of the economy to put Pakistan on a growth path and highlighted the accountability of distribution companies’ staff in addressing power theft.

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