Senate committee on power asks to review agreements with IPPs to resolve energy crisis

ISLAMABAD: Senate Committee on Power on Tuesday said that the only resolution to this country wide energy crisis is to make efforts to review the agreements of IPPs in detail and have the estimated prices re-evaluated as per their legal framework.

The Senate Committee on Power met under the Chairmanship of Senator Saifullah Abro to discuss the recently inflated electricity rates, which have led to civil disobedience and restlessness among the masses at large.

The Committee received a detailed briefing from the Power Division. The Chairman Committee, after deliberating at length, concluded that the only resolution of this country wide energy crisis is to make efforts to review the agreements of Independent Power Producers (IPPs) in detail and have the estimated prices re-evaluated as per their legal framework. He said that IPPs should not work independently without monitoring, leading to over invoicing. He said that the entire infrastructure needs re-examination and review on clauses of misinformation and fraud. The Committee remarked that the entire power sector has been set up by IPPs and inquired on what basis the payments were made to the IPPs. The Committee expressed its serious reservation on non-provision of 10 years break down of payments made to IPPs and resented that CPPA-G being the center of the power division should know details on figure tips. The Committee reiterated that the people of our country will never get relief until unqualified officers are being continued & appointed by the Power Division. It was apprised that there are total 104 IPPs and 34 out of 46 IPPs have signed the IPPs relief agreement where tariff rates are being revised. It was further told that Ministry of Finance is negotiating with the IMF, and are operating under the framework agreed with the IMF. The Committee inquired about the breakdown of 44,943 MW installed capacity to which the power Division failed to answer. The Committee believed that the total consumption on the existing infrastructure would be 26000 MW, however, the Power Division replied that installed capacity as a rule must always be double the maximum capacity. The Committee chaired inquired on the demand of capacity payment by the IPP which the Ministry again failed to answer.

The officials said that people will benefit from revised agreement with IPPs. The committee sought detailed data on the IPPs, estimated figures of tariff and the basis on which it was earlier finalized. The Chairman Committee said that all departments will have to play an equal and enthusiastic role to eliminate this dilemma. The committee maintained that all the members committee are representing Pakistan as a whole and stand together to redress this public grievance leading to domestic violence and chaos.  The Committee sought details on policies drafted for electricity theft and kunda connections. It was apprised that 78000 FIR have already been registered and complaint against 12,000 has been lodged.

The Committee while deliberating at length the Rebasing of financial year 2022-23 was apprised that 63.5 pc of total Domestic Consumer will have zero Tariff increase and 31.6 pc of total Domestic Consumer tariff will increase from, Rs 3 to Rs 6.5 /unit, it was further briefed that only 4.9 pc of the total Domestic Consumer will have a tariff increase of Rs. 7.5/unit. Average tariff increase for domestic consumer will be Rs 3.82/unit and all other categories will have tariff increase if Rs 7.5 unit. The Committee lamented the confused and complex policies of the power division on relief for domestic consumers, the committee unanimously recommended to remove tariff increase below usage of 200 units unconditionally without applying clause 6 of the policy on monthly basis.  The Committee urges to draft policies in favor of the vulnerable classes rather than shocking them every day with increased rates and also run awareness campaigns to intimate the public of relief given to them. The Committee observed that the rebasing and tariff increase does not show uniformity.

The committee while discussing the budgeted subsidies for FY 24 apprised that a subsidy of Rs. 976 billion has been reserved for the Power sector. A subsidy of Rs 158 billion has been earmarked for distribution companies, Rs. 169 billion has been earmarked for KE, Rs. 82 billion included in the interest of the Power Holding Company and an additional subsidy of Rs. 126 billion rupees is also included for KE.

The Committee was attended by Senators Fida Muhammad, Zeeshan Khanzada, Saifullah Sarwar Khan Nyazee, Prince Ahmed Umer Ahmedzai, Haji Hidayatullah khan , Bahramand Khan Tangi, Hafiz Abdul Karim and Senator Sana Jamali. Representation from the concerned departments were also present.




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