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Flawed load-management plan to sink power sector

The ill-conceived power load-management plan, being executed by the Ministry of Water and Power for the last one month, by severing supply to a big chunk of industry, will result in reduction in revenue generation of the power distribution companies (DISCOs), add to the circular debt and increase line losses, said sources here Tuesday.

Under a new ploy to eliminate the menace of never-ending outages, the federal government diverted a major portion of scarce power resources to domestic category of consumers, cutting power supply to vital industry including export-oriented units. However, policymakers sitting in Islamabad apparently forget that industry is used to contribute significant share to revenue generation for power distribution companies while consuming comparatively less electricity. Their system losses are almost nil with about 100 percent recovery of billed amount, added the sources.

For instance, sources said industrial load in the areas of Lesco and Fesco that comprised of one of the hubs of industry in the country, very low if compared with total demand of electricity. On the other hand, these DISCOs get around 40 per cent of its revenue from industrial sector. Now with shutting down of most of these industrial units, these DISCOs are going to suffer big revenue losses, claimed sources.

The federal government will have to pay additional amount for subsidising high tariff of electricity as revenue collection from industry would be at its ebb.

Not only this, there are virtually no distribution losses in industrial clusters against high ratio of such losses in domestic and other categories of consumers.

At national level, a senior official of a department concerned said, it is estimated that additional Rs10-12 billion would be added to circular debt in a month for cutting supply of electricity to high-end consumer of industry alone. Industry’s share in national power load power is calculated at about 30 per cent of total, he added. On increasing tendency of distribution losses due to policy flaw, the senior official observed, as high as three per cent increase is feared in distribution losses due to diversion of electricity to network of domestic consumers.

Another recently retired senior official shared similar views while citing power figures of first quarter of 2012. He said it is feared that line losses would be increased by 50 per cent keeping in view latest trend in electricity consumption by various categories. In the first quarter of 2012-13, industrial sector on national level consumed 4,919 million units while line losses were 21 per cent.

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