IRREGULARITIES OF ELECTRICITY TARIFF FORMULA
TARIQ AHMED SAEEDI (firstname.lastname@example.org)
Nov 03 - 09, 2008
Whenever power crisis raises its head, talks of plant installation or power generation come in vogue and go off air as soon as the crisis settles down or some other issue is reshuffled in the public discussions. But basic problems persist on for years without getting solved properly. Again, as an annual recurrence electricity load shedding casts shadow of darkness and public discomforts amid prolonged, unusual scorching season, yet this time, it is compounded with ever-increasing electricity consumption charges.
Already battling with inability in the face of high rise of primary goods prices, incomes of average households get tightened further due to payment of inflated monthly electricity bill, nonetheless ever-squeezing period of power consumption. Affects of load shedding are not limited to only urban areas where population density as well as concentration of industrial activities expand power usage ratio, but spread to nationwide. Across the nation industrial cities have been experiencing greater impact of gap in power demand and supply however, aggravating inefficiency in production processes and hampering routine lives in residential vicinities.
In different dimensions power crisis is disturbing all urban and suburban localities in the country. At some place it is power outage which originally adds to public worries while steep tariff leaning becomes primary cause of quandary at other. The proportion of problems varies place to place however feeling wistful society at large undergoes both these problems. All major industrial areas, be in Karachi, Faisalabad, Multan, or Quetta, are extremely disturbed owing to unstable power supply that begets production damaging losses and overpricing renders industrial outputs uncompetitive in regional and international markets.
When electricity unit charges increased by an average 31 percent, for many a power consumers the increase unfolded to become 100 percent. It was commonly observed that people with monthly electricity bill of Rs. 4000 received over Rs. 7000 bill following a tariff hike. The similar doubled-rise was revealed in a bill of industrial consumer, said a bank officer.
Nepra-power regulatory authority-had allowed KESC to extend its service charges. Basically, after its privatization in 2005 KESC was permitted to follow fuel adjustment formula twice a year. Since the supplier is an ex-Wapda distribution company, it revises tariffs to bring them at par with other Discos governed by the Wapda.
The decision of cutting back the tariff increase by 40 percent was faced mixed emotions with few sceptics termed this as a well orchestrated 'bait and switch' technique that got round of 60 percent rise and through which decrease beautifully outwitted steep increase. Earlier, people that also included business persons got out of streets to lash out new price of electricity.
One power consumer said, "The tariff cut was predefined and not a result of any protest. The rate was increased to a flexible level in the first instance to give a way to decrease in case of its unacceptability by consumers". Following widespread backlash regulator cut down increase in electricity tariff by 40 percent as a public relief measure. In actual terms 40 percent on 31 percent is discounted.
While privatization of Karachi's sloe electric supplier was aimed to improve quality of services, reduce cost of doing business, minimize distribution loss, so far not a single objective has been achieved. New manager of KESC also affirmed old-days claims of investment in efficiency improvement and found push in unit charges as an introductory solution to the power crisis. And why not? Freehand of price determination has been an attraction to private investors.
Abraaj Capital of Dubai has acquired 50 percent shares and management control of KES power limited, which owns 71.5 percent of KESC. Management of the company will now be navigated or influenced by private interests. Relaxed tariff structure is guided separately out of the central price setter ambit. There are numerous anomalies ensconced in tariff formula in KESC. These flaws should be removed in order to make the supplier completely customer oriented.
"If one uses air condition and additional unit consumption is recorded in monthly bill, then monthly calculation will permanently include mean consumption even though one restrains in consuming electricity on AC, confided a KESC official to this scribe.
In spite of repeated attempts to collect KESC version from its freshly appointed spokesperson, nothing was resulted. Abraaj will do best to clarify its position.
A complicated infrastructure of power supply in the financial capital of Pakistan is not easy to understand. Exploiting electricity as congenital right dwellers of squatter and established settlements alike indulge into power theft, exacerbating power deficits. Supply wires floating in air are media of distributing electricity, inviting illegal draw-offs. Poor governance and dissatisfied workforce overlook exploitation of resources and those who are responsible for monitoring irregularities themselves promote or ignore illegal electricity usage.
Certainly, one thing is understood that law abiding citizens often pay the cost of pilferage and power theft, which according to experts, is difficult to round up. Unless power generation is up to the mark and line loss is controlled entirely, will consumers continue to get misbalanced electricity bill?
Induction of digital meter, disclosing price per unit, may become a positive measure to get people rid of overpriced bill and make them do calculated consumption. When sizeable revenue could be burnt in pathetically designed meters that are easily tempered, then why not investment should be directed towards some effective initiation?
While in order to avoid load shedding power generation capacity must be enhanced and line loss be contained, it is timely to rationalize power bill to encourage regular payers and to discourage people falling into aberrations. To avoid disproportional inflating bill consumers adopt power theft as an alternative option. Therefore, regulators have to keep irregularities out of tariff formula in order to stave off counter reactions by consumers.