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THIS is perfect. The power bureaucracy has decided to go on the offensive against users of net-metering services, and decided to describe them all as a ‘burden’ and tell the rest of the power users in the country that their bills are high because a few are escaping the grid by going solar.
And thanks to this misfire, this entirely unnecessary hostility, we now have the perfect illustration of why our country has been sinking into the quicksand of stagnation for so many decades. The central problem is this: as the world changed around them, our bureaucrats were busy trying to save their bureaucracy rather than finding ways to adapt, to keep pace with the change, and better still, to harness the new energies being unleashed all around them.
This has been the story of Pakistan’s journey throughout the economic and technological transformations of the past half century. Our bureaucrats have basically succeeded in convincing successive governments that change is to be resisted, and where it cannot be resisted, it can be admitted only to be stymied later. This is what they did with tax reforms, for example, where the bureaucracy even resisted simple new technologies for automation, preferring manual entry asit endowed them with the discretionary power that enabled the rackets which riddled the tax machinery. This is why liberalisation of trade resulted in little more than a consumption-based growth model here, because we like the consumption part of the package but not the investment part.
The same bureaucrats who have racked up a circular debt of Rs2.3 trillion, who have held up every attempt to try and reform the structure of the power sector to bring performance-based incentives, transparency, merit-based hiring and overall managerial improvements, are now telling us that net-metering consumers are a ‘burden’ on the country.
What is broken in our power system is not the explosive growth of net-metering beneficiaries.
Our power minister, for example, claimed via his social media handlethat there are now 283,000 net-metering beneficiaries. “However, this has now placed a Rs150 billion burden on the rest of the consumers,” he went on. When challenged on the Rs150bn figure by Miftah Ismail, he backtracked and said the figure related to overall losses and not what was paid to net-metering users. So whose fault is this overall loss of Rs150bn? And if our champions in the power bureaucracy cannot operate their system without racking up massive losses on this scale, then perhaps it is best for them to move aside, because it is they, and their incompetence, that is a burden on the power consumers of this country.
And do you know what happens with this circular debt once it has been racked up? They bundle it into the tariff and pass the cost on to those of us who pay their bills honestly and on time. There have been many such exercises in the past decade, and we are in the thick of another round of this right now as you read this, in order to secure the next tranche of the IMF programme. According to reports in the newspapers, consumers will be asked to pay Rs2.80 per unit as an additional surcharge just to pay the cost of the commercial loan they are taking to help repackage this circular debt. And then they have the nerve to describe others as a ‘burden’.
Who is the real burden here? Those people who availed a government policy, invested their own money to erect solar panels on their rooftops, or the bureaucrats of the power sector who cannot run the system and won’t let anyone else run it either? In India, they have a power system that collectively sells more than 10 times the amount of electricity that Pakistan’s power system does. They also have a problem with the circular debt, or ‘accumulated debt’ as they call it there, and the reasons behind what drives this debt over there are substantially similar to the ones here. Yet their total figure of this accumulated on a per unit basis is $68 compared to $78 in Pakistan. I understand there is a lot to consider before clinching things with this comparison, but given our power sector champions have a job 10 times smaller to do than their peers across the border, perhaps they could at least score slightly better on this scale?
But here is what our bureaucrats are responding to. In the two years since June 2022, sales of electricity have actually dropped. It is hard to find an example in recent years where power sales fell for two consecutive years. In 2022, and again in 2024, the regulator notified hikes in the base tariff, in part to compensate for this drop, which the distribution companies blamed on the explosive growth of net-metering. Go further back in time, and you’ll notice Pakistan is ahead of its peers in the region in passing on the rising cost of power to its consumers, yet the pesky circular debt keeps returning. We have the fastest-growing power tariffs in the region over the past decade and still the largest rate of accumulation of circular debt.
What is broken in our power system is not the explosive growth of net-metering beneficiaries. That is simply an expression of a revolution sweeping the world, much like the telecom sector saw a revolution from the early 2000s onward which swept away the landline infrastructure as an unnecessary anachronism. The same is happening to national grids around the world now. And vilifying it is not the way forward.
As usual, our bureaucrats are busy shoring up the world in which they have always operated, rather than working to usher in the new that is being born all around us every day. The sad part is none of this was necessary. They could easily have reduced the net-metering rate without launching hostile words against the beneficiaries of that policy. But then again, that would take a little competence, something our bureaucrats are not burdened with.
The writer is a business and economy journalist.
Published in Dawn, March 20th, 2025
