ISLAMABAD - National Electric Power Regulatory Authority Wednesday dismissed the government stance that solar technology alone could considerably dip electricity demand and insisted on addressing broader governance and operational issues within Discos.
The dip in electricity demand was echoed in a public hearing conducted by National Electric Power Regulatory Authority (NEPRA) on a petition by Ex-Wapda Power Distribution Companies (Discos) seeking collection of Rs6.447 billion from electricity consumers on account of quarterly adjustments for the first quarter of FY2024-25 (July-September).
Initially, Discos had requested the National Electric Power Regulatory Authority (Nepra) to allow them collection of an additional Rs8.71 billion, however, later it was downward revised to Rs6.477 billion. In the revised petition, Discos have downward revised the capacity charges to Rs6.99 billion from the early claimed Rs8.065 billion.
Similarly, Rs1.25 billion amount requested on account operations and maintenance costs has been downward revised to Rs 993 million. The claim of Rs1.65 billion on account of system charges and market operations fees (UoSC &MoF) has also been downward revised to Rs1.491 billion.
Interestingly, the saving of approximately Rs2.25 billion which was claimed by Discos in the initial petition, on account of minimizing transmission and distribution losses, has also been upward revised to Rs 2.993 billion. NEPRA officials noted a 10 per cent decline in electricity sales, with Faisalabad Electric Supply Company (FESCO) reporting a 14 percent drop. FESCO representatives cited a 50 per cent reduction in tube well electricity demand as the main reason.
Similarly, Multan Electric Power Company (MEPCO) experienced a 45 per cent decline in demand. NEPRA Member Rafiq Sheikh dismissed the notion that solar technology alone could significantly curb electricity demand. Instead, he urged addressing broader governance and operational issues within DISCOs.
He argued that privatization is the only solution for improving the performance of DISCOs. “The current structure is unsustainable; these companies cannot operate under such conditions,” he stated. Sheikh also recommended dividing DISCOs into smaller units to enhance efficiency but cautioned that governance reforms are critical for meaningful improvement.
NEPRA Member Mathar Niaz Rana stressed the need for a study to project where solar and battery prices will stand in a year. “Declining prices could significantly change the dynamics of the energy industry,” he remarked. NEPRA Chairman Waseem Mukhtar suggested exploring whether the study should be conducted by the Lahore University of Management Sciences (LUMS) or the Power Division.
The authority also discussed how advancements in technology could impact DISCO operations in the next two to three years, emphasizing the importance of future planning to adapt to changing industry trends. NEPRA officials highlighted that if electricity consumption had not decreased, consumers could have saved Rs50-60 billion in costs.
Member Maqsood Anwar Khan attributed lower consumption to loadshedding, saying, “DISCOs are resorting to loadshedding to minimize losses, which is reducing electricity usage.” Officials also pointed to the shutdown of the Neelum-Jhelum power project as another burden on consumers, further exacerbating the financial challenges in the sector. The quarterly adjustment application includes additional charges for all power consumers, including K-Electric customers, except for lifeline consumers. NEPRA will release its final decision after further review of the data.