The financial audit report for the fiscal year 2022-23 has revealed a range of factors that have led to an increase in electricity bills and basic tariffs.
Challenges in the Power Sector
During the mentioned financial year, consumers were issued electricity bills totaling Rs 2,302 billion by distribution companies. However, the companies could only recover Rs 1,849 billion, resulting in a substantial shortfall.
Electricity theft and non-recovery rate among distribution companies emerged as a major concern, with a staggering 60% rate. This resulted in losses amounting to Rs 136 billion. A significant increase compared to the previous year’s losses of Rs 91 billion.
Contributing Factors
Non-standard power plants were identified as one of the contributors to the financial burden on consumers, incurring additional costs of Rs 41 billion.
The dependence on expensive imported fuel further burdened the exchequer. With an audit report revealing costs of Rs 126 billion due to rising fuel prices.
Impact of Defaulters
Permanent defaulters were found to be a significant factor in the surge of electricity bills, with defaulters worth Rs 1,000 billion in the power sector.
The ‘Capitation Payment’ System
The ‘capitation payment’ system was also highlighted as a cause of financial instability in the power sector, adding to the overall strain on distribution companies.
Effectiveness of Regulatory Controls
The audit report has raised questions about the effectiveness of the National Electric Power Regulatory Authority (NEPRA) controls. Which further contributed to the challenges faced by the power sector.
These collective challenges resulted in increased electricity bills and a surge in the basic tariff for consumers.
