Energy Minister Awais Leghari. Photo: Online
ISLAMABAD:
Energy Minister Awais Leghari admitted on Thursday that soaring electricity prices had pushed consumers to install solar panels, even as the government’s main coalition partner, the Pakistan People’s Party (PPP), likened recent changes in net metering policy to “open theft and fraud.”
While acknowledging that the tariff hike had kept people away from the national grid, the government, in another highly controversial move, imposed an additional charge of Rs 200-675 per consumer on residential users to raise funds to compensate for the assistance given to industrial consumers.
Addressing the launch ceremony of a program to replace conventional fans with energy-efficient models, the energy minister acknowledged that the high cost of electricity had forced people to adopt solar-based solutions and that changes to net metering regulations were painful.
However, the minister’s remarks appear to be little more than lip service, with the government at the same time imposing an unwarranted burden on ordinary consumers. To provide relief of Rs 4.04 per unit to just 301,384 industrial consumers, the government imposed an additional burden of Rs 132 billion on residential users.
Under the revised structure, the government has imposed monthly fixed charges of Rs 200 on protected consumers using up to 100 units, Rs 300 on protected consumers using up to 200 units, Rs 275 on unprotected consumers using up to 100 units, Rs 350 on 200 units, Rs 400 on 300 units, Rs 500 on 400 units and 675 Rs per month for consumers using more than 100 units. 400 units.
Such blatant abuse of power has forced people to abandon the national grid and turn to off-grid solutions such as solar panels. The government also charged residential consumers an additional Rs 12 per unit as cross-subsidies and Rs 3.23 per unit as debt servicing, liabilities arising directly from inefficiencies in the power sector.
Compared to a power price of around Rs 11 per unit, consumers have to pay up to Rs 60 per unit, a disparity widely seen as the main reason for the growing exodus from the national grid.
The energy minister acknowledged net metering “reforms” could cost the government political capital, but promised the changes would continue.
However, the PPP, whose support is crucial for the government to retain its majority in the National Assembly, has launched a scathing attack on the abrupt changes to the solar net metering policy.
“This was open theft and fraud,” said PPP MP Sharmila Faruqui, speaking about a notice of appeal submitted by the party to the National Assembly.
PPP MPs Syed Naveed Qamar, Aijaz Hussain Jakhrani, Dr Nafisa Shah, Dr Sharmila Faruqui and Mirza Ikhtiar Baig drew the attention of the Minister for Power Division to a matter of urgent public importance regarding the implications of the revised solar policy.
Responding to criticism, Leghari told the House that of Pakistan’s total installed solar capacity of between 20,000 and 22,000 megawatts, only about 6,000 megawatts were linked to net metering. As a result, he said, only 600,000 to 700,000 consumers, or about 8 to 10 percent of total solar users, would be affected.
“There will be no impact on low-income consumers,” he assured the House.
However, just a day earlier, the Energy Minister had claimed that only 1 per cent of total consumers would be affected by the change in net metering policy. Under the new regulations, the government would purchase electricity from solar panels at Rs 8.13 per unit, while selling electricity at rates of up to Rs 60 per unit.
Leghari rejected claims that the new regulations were anti-solar, arguing that reducing the profit margin for net-billed consumers from 50 percent to 37 percent did not constitute an anti-people measure.
Responding to the minister’s remarks, Faruqui objected to the government “blaming net metering users for charging on the national grid.”
“These consumers are the ones who followed the government’s clean energy policy,” she said, adding that authorities had made a “flip-flop on their policy.”
“Now they are justifying it by blaming the people who were at the forefront of your policies,” she added.
Faruqui argued that the Electricity Division was effectively passing on costs resulting from “line losses, transmission losses, inefficiency, inconsistency, corruption and capacity payments” to ordinary citizens, once again calling the move “daylight theft.”
In his response, the minister said the warning was no longer relevant “since the Prime Minister has already said that net metering should be discontinued and consumers would remain on net metering for the time being. But this change only concerns existing solar panel owners, and that too until the National Electric Power Regulatory Authority decides on a review petition which is yet to be filed.”
Leghari, alongside Climate Change Minister Musadaq Malik, also launched the Prime Minister’s Fan Replacement Program, which aims to replace 88 million conventional fans with energy-efficient models over a 10-year period.
Under the scheme, existing fans can be replaced at a cost of Rs 12,000, the amount, including interest on loans, to be recovered through electricity bills. The program offers on-bill financing, allowing consumers to pay in installments over six to 18 months, for new fans that use 70 percent less energy.
The energy minister said the country’s cooling load requirements were between 6,000 and 8,000 megawatts and the introduction of energy-efficient fans could significantly reduce demand during peak hours.
He further noted that Pakistan currently lacks stable electricity demand due to increasing use of solar energy and low industrial activity, with national demand recorded at just 8,000 megawatts on Thursday.
However, despite acknowledging that winter demand hovers around 8,000 megawatts, Energy Division officials made a highly questionable statement to television presenters on Wednesday that the government had added 8,000 megawatts of capacity to the national grid to meet electricity demand during periods of low solar production.
