Mirza Hamid Hassan, Chairman PM's Task Force on Power Tariffs Rationalisation, stated this while addressing a seminar organised by Sustainable Development Policy Institute (SDPI) on "Electricity Tariff Regulation" here on Monday.
Mirza Hamid Hassan, who also served as secretary Water and Power, said that at present government had no executive powers to reduce electricity tariffs on its own. The task force's recommendations would eventually have to go to National Electric Power Regulatory Authority (Nepra) for proper approval. The task force would not be suggesting reducing specific tariff rates, nonetheless it would be suggesting technical, financial and commercial measures to reduce power tariffs.
He said that the recommendation had been finalised and would be presented to the government soon.
Mirza said that the task force would be recommending to the government that certain past decisions that had resulted in higher tariff rates be reversed to benefit consumers.
The meter-testing process should have consumers' representatives to ensure transparency and fairness.
Hussain A Babur, Director Privatisation Nepra, said that the authority is an independent organisation and working without any pressure from any quarter. He described deregulation of the power sector as positive step towards reforming this sector.
He said that privatisation and free market competition in future would prove to be useful, as it would result in reducing tariffs for power consumers.
Hussain A Babur said that Nepra would only conduct hearings of tariff petitions, if it regarded them to be useful as Nepra act contains a provision that allows the Authority to stop conducting public hearings if they lose their usefulness.
Nepra would then take decisions without conducting public hearings.
He stated that unbundling of Water and Power Development Authority (Wapda) into distribution companies did not help in minimising line losses and theft of electricity.
Mukhtar Ahmed, Executive Co-ordinator, Consumer Rights Commission of Pakistan (CRCP), gave the example of Orissa in India, where power sector is completely deregulated, that, he said, resulted in higher line losses and more inefficient companies delivering the service at higher tariffs.
He said that same model is being followed in Pakistan and results would hardly be different.
He claimed that Wapda would save Rs 2.4 Billion if it decreased its line losses by 1 percent. A decrease of 10 percent would result in a saving of Rs 24 billion, which would be enough to make it financially viable.
He further said that this is an achievable target, however, it requires proper planning and reasonable timeframe for its accomplishment.
Fahd Ali, energy analyst from SDPI, said that Nepra at present works under great pressure from Government of Pakistan (GoP) and to some extent Wapda and IFIs.
Quoting media reports, he said that recently while conducting hearings on a petition filed by Hyderabad Electricity Supply Corporation (Hesco), Nepra's chairman openly admitted that the hearing was being conducted in a hurried manner since the authority was under tremendous pressure from the GoP.
This open admission on the part of Nepra's chairman leaves little doubt on the nature of influence that GoP is able to exercise on the Authority's supposedly independent functioning.
He said that there is also a need for decentralising Nepra's powers and functioning in order to improve public participation and introduce transparency.
It is imperative that regional offices are set up and hearing should be conducted in relevant areas, because one hardly sees the point of conducting Hesco's hearing in Islamabad, when the affected people of the judgement are sitting some 1400 km away in Hyderabad.