PRESIDENT Asif Ali Zardari called on Thursday for finding a win-win solution to address not only the issue of rising energy costs but of paying capacity charges to the Independent Power Producers (IPPs), conveying he was aware of the problems being faced by people and the business community due to the current energy crisis. Going a step further, he proposed that the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) should form a Committee and work with the President’s Office to develop a viable solution to the issue of paying capacity charges to the IPPs.
The President deserves credit for initiating a practical move towards an amicable solution of the growing energy crisis, which has become a source of concern for the entire country. The FPCCI delegation, which called on the President, rightly pointed out that rising energy costs were overburdening the people, industry, agriculture and exports sector, emphasizing the need for reforming the energy sector to bring down energy prices. The president’s intervention and suggestion has come on the heels of former policy makers, renowned experts and industrialists recommending a series of steps, including parliamentary legislation, slashing taxes and ordering forensic audit of IPPs in a bid to reduce inflated power bills and to avoid further economic chaos triggered by the energy crisis. The issue of capacity charges is the product of lack of vision and wrong planning and decision-making on the part of the successive governments as they blindly invested on increasing the generation capacity without caring about actual demands. Some payment on account of capacity charges becomes understandable because of difference of the consumption in summer and winter but it is alarming that the capacity charges constitute about one-third of the electricity tariff. Apart from initiating a dialogue with the IPPs for revision of the capacity charges, the focus should also shift towards hydel power generation, solar and wind power that can help bring down the tariff significantly. Similarly, an aggressive and non-discriminatory campaign should be launched to end wholesale theft and default in bill payment besides proper investment on upgrading and modernizing the transmission and distribution systems to bring down the line losses.
