Third Meeting of Committee on Energy
Islamabad: Third meeting in the series of meetings of the Committee on Energy formed by the Prime Minister was held under the Chairmanship of the Minister of Finance along with Minister of Water and Power, Minster of Petroleum and Natural Resources and Deputy Chairman Planning Commission as members. Representatives from the M/o Finance, M/o Water and Power, Planning Commission, NEPRA and Economic Reforms Unit attended the meeting.
The proceedings of the third meeting focused on the issues related to power generation especially the Independent Power Producers (IPPs) including affect of circular debt, outstanding payments and a sustainable way forward to devise a permanent solution to liquidity issues of the sector. The committee held a detailed discussion with the representatives of IPPs. IPPs presented their point of view on the issues affecting the smooth functioning of the power sector. Two smaller committees with a clear mandate were formed. These sub-committees will develop proposals for the resolution of issues highlighted during the third meeting.
It may be mentioned, that the Committee on Energy to date has reviewed the targets of estimated revenue and cost of power purchase for FY12. The budgeted amounts of subsidies for FY12 that have been developed after thorough analysis by M/o Water and Power aided by PEPCO and allied finance wings of distribution companies and in consultation between the Ministry of Water and Power and Ministry of Finance have been reviewed by the committee. Due to the dynamic nature of these numbers because of various input costs like oil and gas prices, adjustments continue throughout the year to meet the targets set at the beginning of the year. The Committee has deliberated on mitigating measures which are being pursued.
The liquidity crunch in the system is a varying figure as it is affected by market prices of fuel, generation mix, sale price of electricity, line losses and collections. Committee is focusing on the effects of these established figures on the dynamics of the power sector. The difference between payables and receivables is being continuously monitored and needs to be reduced to a sustainable level. Any weaknesses in the system and their overall effect are being analyzed by all stakeholders including PEPCO, NEPRA, IPPs and DISCOs on a continuous basis.
NEPRA as the regulator of the sector under a well developed and proven mechanism manages, regulates and monitors the entire sector to ensure sustainability and rights of the consumers. It takes into account all key issues of power sector, through an elaborate mechanism of tariff petition and public hearings. NEPRA while onboard in the entire discussion will also give a detailed presentation of the entire mechanism.
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