By holding in abeyance a request by the distribution companies for an increase in security deposits, the National Power Regulatory Authority has shown some spine at last. The increase in the security deposit would have brought a one-time payment of billions. Several representatives of industry appeared before the Authority, arguing that the proposed increase of 2600 percent in the security deposit. As industrial connections already have a high deposit rate, so such a massive increase would, exam a one-time payment to the distribution companies. While it may make the booked look good during the IMF review due next month. The reason for refusing the increase is that the `discos have not reduced their transmission and dispatch losses. It is not s if NEPRA has not pointed this out before. NEPRA has asked what has been done with existing security deposits. If those security deposits have been merely used as spare cash, it would shed a harsh light on the Discos’ management methods. NEPRA has also enquired about line losses, implying that if losses were reduced, the need to rise deposits would not be there. The implication is that NEPRA might be running out of patience, and it should not be assumed that the DISCOs will automatically grant the tariff increases they demand.
If the tariff hikes are obtained on the ground that the IMF has prescribed them, then the argument made by industrialists, that the security deposit hikes will affect imports, deserves consideration. Industry is already smarting from the new gas tariff for the Captive Power Plants, which the IMF has deemed inefficient. It is being forced to buy power from WAPDA, and the increase in the security deposit is meant to compensate WPSA for going along with solar power, apart from the tariff revision meant to discourage it.
The Power Division is likely to insist on the security deposit increase. NEPRA must stop it, not just because its would be bad for the country, and would reward the DISCOs for being inefficient and conniving at the line losses. It should remember that it cannot effect positive change by punishments, but will do so only it makes an example of one or more DISCOs, making it a certainty that failure to function efficiently will not be rewarded. The government is trying to give relief to the consumer by reducing tariffs, so taking back in securities what is happened ds ved in tariffs seems needlessly cruel.
