Our power pricing dilemma

#power #pricing #dilemma

LAHORE: The problem of a very misunderstanding in the dynamics of Pakistan’s business government is the recovery of electricity prices and costs. Business often compares electricity costs (received by IPPS) with the final retail tariff, without factoring at any other expenses.

Other expenses include the construction and maintenance of a high -voltage national transmission system (NTDC) in Pakistan. Then the cost of distribution comes. Local disco (such as Lesco, Electric) run expensive distribution infrastructure. Both of these companies need to receive costs from consumers. Technical losses due to resistance to wires are inevitable (usually 6-15 % globally).

Theft, meter tampering and unpaid bills, which often include corrupt staff, domestic and consumers, also put burden on disco and honest consumers who are related to Pakistan. Businesses ignore that the state simply does not buy and recover the electricity-it manages a highly capital supply system.

The question is, who should bear the cost of line losses and infrastructure? And who should pay the government for the losses before reaching the industrial grid? In principle, all users should share proportional costs unless they have their own breed and delivery setup. Businesses cannot claim immunity from line losses only because their own grids are effective in their home. The cost to bring electricity to their doors is still there. As long as they form and maintain their transmission and distribution network, they cannot logically refuse to pay these losses.

In India, large industrial consumers (especially in special economic zones or large industrial parks) set up captive power plants and sometimes fund dedicated transmission lines. However, they usually use public transmission grid and are subject to wheeling charges, transmission losses and cross subsidies.

In Bangladesh, this system runs like in Pakistan. Its government (through PGCB and distribution companies) maintains the grid. Large users can discuss better rates, but they do not participate in the loss until they are completely off grid.

In developed economies like the United States and Germany, electricity prices include all the extraordinary components: generation, transmission, distribution and, in some cases, renewable surcharges. Industrial users often talk at lower prices, but they cannot be out of transmission and distribution costs unless they generate their electricity on the site (such as, gas turbines, solar farms) that are completely off -grid. In many sectors, ‘wheeling charges’ are applied when private buyers are transferred through the national grid.

Power pricing in Pakistan is a cause for concern as the business lobby only demands generation -based taxes, easily ignores that the transmission system is used less because of theft and defective, which they indirectly benefit. Maintaining reliable grid requires huge investment, even if they do not directly cause all losses. Many businesses also benefit from tax exemptions, subsidized gas or low salaries, which means they are not paying their real economic part.

If the business really wants electricity at the generation cost, the fair view will be to make their transmission lines from power plants to their premises (rare and expensive). They should accept wheels compensation and line losses as part of the service. If this is possible, they should invest in a divided generation (solar, co -generation). Businesses should also support disco reforms that reduce theft and demand only lower prices rather than improving billing. They should help eliminate dishonest actors from their ranks.