During a meeting of the Senate Standing Committee on Cabinet Division, chaired by Rana Mahmoodul Hasan, NEPRA Chairman Waseem Mokhtar shared potential solutions to the ongoing issue of high electricity bills.
He said only maintaining microeconomic stability could prevent further increases in electricity rates.
NEPRA Chairman said that stable microeconomics is crucial for keeping electricity rates steady. "If the microeconomics remains stable, then electricity rates will not increase," he stated.
He further added that without investor confidence and economic stability, the rising price of electricity cannot be controlled.
Committee members expressed their frustration over the escalating electricity prices, stating that the public is feeling the pressure. “Due to the increase in electricity prices, people are holding us by the neck," they noted, adding that, “Independent Power Producers (IPPs) linked to 40 families are significantly burdening the public. The IPPs of these 40 families are costing the public dearly.”
Members identified the IPPs as a major source of public anxiety, criticizing the current contractual agreements and calling for a forensic audit of these contracts.
The committee questioned the rationale behind permitting a coal plant in Sahiwal, highlighting the logistical challenges of transporting coal by train from the port. They stressed the need for a comprehensive solution to escape the "trap" of IPPs, urging for a thorough review and possible renegotiation of IPP tariffs.
The members called for forensic audit of IPP contracts to ensure transparency and fairness along with a strategic plan to mitigate the high costs associated with IPPs and explore alternative energy sources.
The meeting underscored the urgency of stabilizing the economy and fostering investor confidence to manage electricity rates effectively.
Nepra Chairman Waseem Mukhtar said; “In the World Bank (WB) meeting, Nepra was told that the regulator has reservations. World Bank said that all objections show that the regulator is working properly.”
‘Nepra to decide whether to protect consumers or 40 families’
Nepra should decide whether to protect consumers or 40 families? Committee members said.
Nepra chairman said: “Where did the mistake happen, people are getting electricity unit at Rs80. The capacity in the country has been installed in line with the industrial growth of 6 percent.”
“Due to power shortage in the past, contracts were made with IPPs in dollars. Investors see their protection, loss due to increase in dollar rate,’ Chairman Nepra said.
“We have eliminated cross subsidy of $150 billion from the industry. The industry was giving cross subsidy of $220 billion to domestic consumers,” he said.
“Will open the wholesale market from October. When the wholesale market is opened, the big consumers will leave,” Nepra Chairman said.
“Consultation is ongoing, if the wholesale market is opened, how to lift the burden from the users in the system. If the industry leaves, then domestic consumers will either have to increase the tariff or increase the subsidy,” Nepra chairman said.
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