Tariff troubles

There is more bad news for the citizens of Karachi as they brave the deadly heatwave that has struck the city. After the Sindh High Court vacated a stay order on power tariff, the National Electric Power Regulatory Authority increased power tariffs by between 20 to 80 percent for all Karachi consumers using over 300 units per unit. The increase in tariff ranges between Rs2 and Rs4 per unit. It was Karachi’s privatised power distribution company, K-Electric (KE), that had obtained a stay order from the SHC to keep tariff lower than the national tariff. The decision to vacate the stay order means that the subsidy offered to consumers has been finished, with the Ministry of Water and Power claiming that KE tariffs were now the same as the rest of the country. The ministry claimed that Karachi consumers had already been provided relief due to the existing stay order, but it was now imperative to increase tariffs. The decision came as the government cut the subsidy to KE from Rs36 billion for 2014-15 to Rs20 billion for 2015-16.
The price hike will put more pressure on the citizens of Karachi, who are already facing extreme heat and outages. The decision will increase pressure on KE, whose performance came under question in the Senate Standing Committee on Water and Power on Friday. The Senate blamed the KE management for the loss of hundreds of lives in the current heatwave. During the same meeting, a battle between Nepra and KE was witnessed over the performance of the privatised entity. The two disagreed on all figures, including generation, reliability of distribution and transmissions system and investment in power infrastructure. Committee members accused KE of not meeting its commitments to increasing power generation capacity which KE countered by claiming it had installed four new plants with a capacity of 1037MW. The Nepra chairman has claimed that, based on K-Electric’s figures, the company faces a shortfall of 370-400MW which would mean loadshedding should not exceed four hours. Actual loadshedding figures have been much worse. Nepra has also accused KE of under-utilising its resources to receive subsidies from the federal government. Tariffs have also come under discussion and KE has also been accused of making Rs361 billion without sharing the benefits with consumers. While criticism and accountability is very important, the Senate missed the fact that KE tariffs were set to be increased by Nepra. With consumers facing a greater burden, do the increased tariffs guarantee uninterrupted supply of electricity? The reality is that the tariff increase does not offer a solution to the country’s power woes, whose seriousness has once again been confirmed by the Karachi heatwave.