A study conducted by the Pakistan Institute of Development Economics (PIDE), under the Research for Social Transformation & Advancement (RASTA) program, underscored the pressing need to modernize the billing system aimed at overhauling the power sector standing at a crucial juncture.
The study advocates for the adoption of smart meters as a solution to address financial losses, billing inaccuracies, and inefficiencies in the power grid, a news release said.
For nearly two decades, it said, Pakistan’s reliance on a manual billing system has led to significant financial deficits, exacerbated by outdated infrastructure and rampant electricity theft.
“Power distribution companies (DISCOs) struggle with revenue recovery, while consumers frequently encounter billing discrepancies. A transition to Automated Metering Infrastructure (AMI) offers a transparent, data-driven approach to electricity management, ensuring efficiency and accuracy.”
PIDE Vice Chancellor Dr Nadeem Javaid emphasized the urgency of this transition, stating, “Our electricity billing system’s inefficiencies are a major cause of financial losses and consumer frustration. Smart meters provide a modern solution that reduces theft, enhances billing accuracy, and empowers consumers to manage electricity consumption more effectively. The transition is necessary for a more sustainable and efficient power sector.”
The study, authored by Afia Malik, Tehmina Asad, and Ghulam Mustafa, highlighted the benefits of shifting to smart meters.
A survey conducted across major cities, including Rawalpindi, Islamabad, Lahore, Multan, Faisalabad, and Sukkur, revealed that 79% of respondents were willing to adopt smart meters, even if they had to bear the initial cost. The findings suggest that households using smart meters could reduce their electricity bills by up to 17%, while DISCOs could significantly improve revenue collection.
Case studies demonstrated the potential impact, with LESCO estimated to save Rs960 million from FY2016-17 to FY2023-24 on three high-loss feeders, and MEPCO generating an additional Rs 2.2 billion in revenue within 11 months of installing 150,000 smart meters. International examples further reinforced the effectiveness of smart meters, with Ghana witnessing a 13.2% increase in reported electricity consumption following the installation of smart prepaid meters, exposing previously undetected electricity theft.
While the advantages of smart meters are clear, the study stresses that successful implementation requires strategic execution.
A survey of 800 consumers from LESCO and MEPCO indicated that consumer awareness and engagement are critical to adoption. To ensure a smooth transition, the report recommended initiatives such as consumer education programs to build trust, flexible payment plans that allow consumers to pay in installments through their electricity bills, and the development of a competitive smart meter market to drive down costs through increased competition.
“Beyond financial efficiency, smart meters can facilitate Pakistan’s transition to a more sustainable energy system. Their integration with mobile applications and smart grids can optimize energy distribution and promote the adoption of renewable energy,” it added.
However, achieving these benefits required strong government support and policy alignment.
As countries worldwide embrace digital advancements in utility management, the study suggested, Pakistan must not delay in modernizing its power sector.
“Smart meters offer a pathway to transparency, efficiency, and financial sustainability, but their success depends on a collective effort from policymakers, DISCOs, and consumers,” it added.