LESCO Refunds Rs. 80 Billion to Consumers Amid Overbilling Concerns

The Lahore Electric Supply Company (LESCO) has refunded an estimated Rs. 80 billion to consumers following revelations of overbilling, Pakistan’s Energy Minister Awais Leghari informed the Senate Standing Committee on Power on Friday.

During the meeting, Leghari addressed concerns over electricity tariffs, stating that while a significant reduction of Rs. 20 in tariffs is unlikely in the immediate future, incremental reductions of Rs. 0.20 are being considered. He reassured the committee that ongoing efforts may yield positive outcomes in the coming weeks, and that no government agreements have been violated in the process.

The Minister also provided updates on the government’s negotiations with Independent Power Producers (IPPs) aimed at reducing their profit margins. A dedicated task force has been established to assess the operations of both state-owned and private power plants. This review will determine which plants should remain operational and which ones could potentially be closed. Additionally, the task force is scrutinising market rates for furnace oil and coal to address rising energy costs.

A key topic of discussion among committee members was the pricing inconsistencies of bagasse, a byproduct of sugarcane used as fuel in power generation. The reported cost of bagasse, which ranged between $75 and $356 per ton, was met with dissatisfaction. Committee members called for a review of the pricing mechanism, arguing that as a locally sourced raw material, bagasse should have a consistent and transparent rate.

The Chairman of the National Electric Power Regulatory Authority (NEPRA) acknowledged that a regulatory framework for bagasse and biomass was introduced in 2013. However, there is currently no mechanism in place to determine the exact pricing for these resources. The committee has urged for an immediate review to address the issue and ensure fairness in the pricing of renewable energy materials.

The discussions highlighted the government’s commitment to improving transparency in energy pricing and managing the country’s energy resources more efficiently, with the goal of providing relief to consumers while maintaining fiscal responsibility.