Earlier this week we heard of PSO warning the government of the upcoming power crisis if the case of circular debts is taken up. It is now learned that PSO gets enough founds to keep supplies on to the IPPs. Express Tribune report gives the details.

The finance ministry has released Rs12 billion on an urgent basis to Pakistan State Oil (PSO) in order to help the public-sector oil marketing company avoid default. The release comes a day after the PSO management suspended supplies of furnace oil to independent power providers Hub Power Company (Hubco) and Kot Addu Power Company (Kapco).

“The finance ministry released a payment of Rs12 billion to PSO today (Saturday) and has also given assurances that another Rs24 billion will be paid to the company by Tuesday, September 21,” the PSO spokesperson told The Express Tribune. “In light of the release and commitments, we are resuming supplies to Hubco and Kapco.”

But analysts commented that the latest move by the finance ministry is a stop-gap arrangement at best. “The government will have to come up with a comprehensive solution to inter-corporate debt,” pointed out Khurram Shehzad, Research Head at InvestCap.

The PSO management has also highlighted that the company is facing difficulties in collecting outstanding receivables worth more than Rs149 billion from its customers. “About Rs120 billion of these outstanding dues are owed by the power sector,” said the company’s spokesperson.

PSO’s profitability has suffered because of mounting receivables. In the last fiscal year, the company’s financing cost stood at a towering Rs9 billion.

Petroleum ministry officials claim they are working on a permanent fix for circular debt but sources have informed that hopes for an early solution have been dashed by recent floods in the country as a plan to divert funds from the budget to meet power sector dues has been shelved in favour of flood relief efforts.

Prior to the release of funds by the finance ministry, PSO had also delayed the awarding of import tenders for the months of October and November. The delayed orders would have been for about 650,000 tons of petroleum products and a delay or cancellation in delivery may hold dire consequences for the country’s energy sector. Even after these assurances, the supply of fuel in the country remains choked.

Sources have disclosed that a decision on whether import orders will be scaled down or restored to prior plans will be taken by the senior management on Monday.

Meanwhile, PSO’s managing director, Irfan Qureshi, has asserted that the company has an abundant stock of petrol. While talking to reporters on Saturday, he reiterated that the issue of circular debt must be addressed on a long-term basis.

The National Electric Power Regulatory Authority (Nepra) allowed on Tuesday a 26 paisa per unit increase in power tariff for consumers of nine distribution companies of Wapda from August 31 on account of monthly fuel cost adjustment.

A Nepra official told Dawn that power companies had sought an increase of 52 paisa per unit under the fuel adjustment formula for July.

But the power regulator allowed an increase 26 paisa and turned down the rest sought on account of system losses, late payments and overall circular debt.

The official said that Nepra had sent its determination to the federal government for notification. The new tariff will be recovered from consumers in the next billing month. The new tariff will not apply to KESC whose fuel-based tariff adjustment will be made separately.

With the latest increase, the tariff will see a cumulative surge of about Rs1.76 per unit in three months — May, June and July — raising the total per unit cost to about Rs4 per unit.

Last month, Nepra allowed a 64 paisa per unit increase and in June the government separately increased base tariff for all consumers, including KESC, by 7.6 per cent or 50 paisa per unit under an agreement with the IMF. Separately, Nepra increased 52 paisa per unit as monthly fuel cost adjustment for June.

Since March last year the government has increased tariff by about 80 per cent.

via DAWN.COM

Pakistan Supreme Court got involved with NEPRA on the issue of power rates going up. It has issued a stay order on proposed increase in power tariff, which was withdrawn on Thursday.

A three-member bench of the apex court comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Chaudhry Ijaz Ahmed and Justice Jawwad S Khawaja withdrew the stay order on assurance of National Electric Power Regulatory Authority that it would not raise power tariff.

The bench hearing a suo moto on the proposed raise in electricity tariff also issued notices to ministries of water and power, finance to inform the court about the withdrawal of subsidy on power tariff and adjourned the hearing till three weeks.

Counsel for NEPRA, Anwar Kamal told the court that the government has decided not to withdraw subsidy on electricity charges for the time being.

He said that as far as NEPRA is concerned it only makes recommendation on power tariff after examining the suggestions given by power generation companies keeping in view their revenue requirements.

Chief Justice Iftikhar Muhammad Chaudhry took suo moto on appeals and columns that appeared in different sections of print media requesting therein that rates of electricity have been increased despite of decrease in oil rates at International Market.

Via Business Recorder

Business Monitor International, a reputable research firm, has released the following report and forecast about Pakistan’s power sector. The country tenth out of 11 countries in the region.

Many countries are facing the problem of transporting renewable power from where its generated to where its needed. Pakistan has the similar problem that the wind power may be generated in one part of Sindh while it may be needed in another part. Aging transport infrastructure for power is a serious problem in developed countries as well as developing countries. Probolem: it requires a whole lot of money to build a better infrastructure. Untill we solve this problem, renewable power will not be a reality. See excerpts from this great article in Technology Review.

(There are) immense challenges ahead as power from renewable sources, mainly wind and solar, starts to play a bigger role around the world. To make use of this clean energy, we’ll need more transmission lines that can transport power from one region to another and connect energy-­hungry cities with the remote areas where much of our renewable power is likely to be generated. We’ll also need far smarter controls throughout the distribution system–technologies that can store extra electricity from wind farms in the batteries of plug-in hybrid cars, for example, or remotely turn power-hungry appliances on and off as the energy supply rises and falls.

Researchers at the National Renewable Energy Laboratory in Golden, CO, have concluded that there’s no technical or economic reason why the United States couldn’t get 20 percent of its elec­tricity from wind turbines by 2030. The researchers calculate, however, that reaching this goal would require a $60 billion investment in 12,650 miles of new transmission lines to plug wind farms into the grid and help balance their output with that of other electricity sources and with consumer demand.

Regulation and governance is also a problem. Reading this just seems like we are in Pakistan or India!

The U.S. grid’s regulatory structure is just as antiquated. While the Federal Energy Regulatory Commission (FERC) can approve utilities’ requests for electricity rates and license transmission across state lines, individual states retain control over whether and where major transmission lines actually get built. In the 1990s, many states revised their regulations in an attempt to introduce competition into the energy marketplace.

Another important point is smarter use of technology to reduce waste of energy and increase awareness.

Homeowners are getting software that lets them view and manage their energy consumption on the Web, and some of their appliances are being fitted with switches that will let the utility shut them off remotely during periods of high demand.

Smart-grid technologies could reduce overall electricity consumption by 6 percent and peak demand by as much as 27 percent. The peak-demand reductions alone would save between $175 billion and $332 billion over 20 years.