A study by the Pakistan Institute of Development Economics (PIDE), conducted under the Research for Social Transformation & Advancement (RASTA) program, has emphasized the urgent need to modernize Pakistan’s billing system to improve the struggling power sector. The study advocates for the adoption of smart meters as a solution to financial losses, billing errors, and inefficiencies in the electricity grid, according to a news release.
For nearly two decades, Pakistan’s reliance on a manual billing system has contributed to major financial deficits, worsened by outdated infrastructure and widespread electricity theft. The study notes that power distribution companies (DISCOs) struggle with revenue collection, while consumers frequently face billing discrepancies. The transition to an Automated Metering Infrastructure (AMI) is presented as a data-driven solution to ensure transparency and efficiency in electricity management.
PIDE Vice Chancellor Dr. Nadeem Javaid underscored the urgency of the shift, stating, “Our electricity billing system’s inefficiencies are a major cause of financial losses and consumer frustration. Smart meters provide a modern solution that reduces theft, enhances billing accuracy, and empowers consumers to manage electricity consumption more effectively. The transition is necessary for a more sustainable and efficient power sector.”
The study, authored by Afia Malik, Tehmina Asad, and Ghulam Mustafa, highlights the benefits of switching to smart meters. A survey conducted in major cities, including Rawalpindi, Islamabad, Lahore, Multan, Faisalabad, and Sukkur, found that 79% of respondents were willing to adopt smart meters, even if they had to cover the initial cost. Findings suggest that households using smart meters could reduce electricity bills by up to 17%, while DISCOs could significantly improve revenue collection.
Case studies demonstrated the financial impact, with LESCO estimated to have saved Rs960 million from FY2016-17 to FY2023-24 across three high-loss feeders, while MEPCO generated an additional Rs2.2 billion in revenue within 11 months of installing 150,000 smart meters. International examples also reinforced the effectiveness of smart meters, with Ghana reporting a 13.2% increase in electricity consumption after installing smart prepaid meters, exposing previously undetected electricity theft.
While the study highlights the clear advantages of smart meters, it stresses that successful implementation requires a strategic approach. A survey of 800 consumers from LESCO and MEPCO indicated that consumer awareness and engagement are critical to adoption. To ensure a smooth transition, the report recommends consumer education programs, flexible installment payment options, and the development of a competitive smart meter market to lower costs through increased competition.
Beyond financial efficiency, the study suggests that smart meters could facilitate Pakistan’s transition to a more sustainable energy system. Their integration with mobile applications and smart grids can optimize energy distribution and promote renewable energy adoption. However, achieving these benefits requires strong government support and policy alignment.
As countries worldwide digitize utility management, the report urges Pakistan not to delay in modernizing its power sector. It concludes that while smart meters offer a pathway to transparency, efficiency, and financial sustainability, their success hinges on a collaborative effort from policymakers, DISCOs, and consumers.
