Tortured and sick of the high electricity bill and frequent power outages, when the consumers who could afford, to set up solar systems on their houses, the government contemplated taxing them.
When the government didn’t pay for the single solar panel, how come it arrogates to itself the right to tax solar system users at the rate of Rs2000 per kilowatt? A reasonable household requires about a 12-kilowatt solar system. Hence it would be taxed Rs24,000.
Fed up with the ever-increasing per-unit cost of electricity by the government, the consumers turned to solarisation of their homes by self-generating 3,000 MW of energy. The cost of solar panels has decreased worldwide and taking advantage of the opportunity, the private sector imported enough solar panels to provide 6,800 megawatts of energy to households and industry.
As a result, the government is finding it hard to pay the capacity charges to the IPPs that now amount to Rs2.2 trillion. With the increase in solar power generation and a retrospective decrease in the government’s ability to pay capacity charges to the IPPs, the government has turned to the World Bank for help.
According to statistics, there are ninety Independent Power Producers. The government signed contracts with them to buy electricity at a certain rate and if it failed to buy, it would pay capacity charges to them. Pakistan Electric Power Company is overall responsible for buying electricity from IPPs and supplying it to various Distribution Companies (DISCOs) that are eleven in number. For instance, LESCO looks after Lahore and GEPCO-Gujranwala.
Discos have become small kingdoms in their own right starting with a chain of command from the CEO to the lineman.
Discos have become small kingdoms in their own right starting with a chain of command from CEO to the lineman, with innumerable ranks in between exercising their authority to show their presence.
With these kinds of heavy-weight upper crests, per unit electricity rate has to jump beyond the reach of even the middle-class household, not to talk of the common man. Wisely, Prime Minister Shahbaz Sharif’s government has decided to privatise the loss-making DISCOs in Punjab by giving the new owners an incentive of concession for 25 years.
Some serious problems exist in the energy sector. First, it’s the creation of more than required DISCOs perhaps to absorb engineers and technicians and solve the job problem whether or not productive is another subject.
Visit any DISCO office and you find it swarming with staff and if you lodge a complaint of failure of power in a certain area, they take their sweet time to reach the spot and correct the problem. Another problem is the antiquated distribution system, which is the usual cause of power failure. Whenever it drizzles, the light goes out, why?
Power theft by the influential and the powerful is a common feature. In villages, the landed men rarely pay for the electricity according to meter readings. Similarly, quite a few industries are involved in similar activities. It’s usually with the connivance of the staff of the many DISCOs. The well-meaning and responsible citizens pay for the units stolen by the well-connected mafia. Of course, not to mention thousands of free energy units officially provided to senior strata of the government.
In the larger public interest, the World Bank may include a condition while sanctioning the loan to cut down the huge bureaucracy of the country. A major portion of the foreign loan is consumed to pay large salaries to honourable judges and bureaucrats besides other innumerable facilities offered to them.
Thousands of cases remain pending for years as the performance of the courts goes. The performance of the bureaucracy is evident by the manner the country is being run. Read the morning newspaper, all you find are the court cases lodged by one or the other political party and new dates given. Imran Niazi steals the show even though he lives in style in the Adiala Jail and is well-fed at public expense.
When electricity consumers have devised ways to avoid heavy bills by paying a heavy original cost to buy and set up the solar system, why should they be taxed? In a lighter vein, when a solar panel user questions the electric power official why they want to tax me so heavily, the only answer the official could offer – is because you’re using government sunlight without paying for it.
The writer is a Lahore-based columnist and can be reached at [email protected]