USAID holds a workshop on Cost of Service and Tariff Design Study, June 7, 2012
Islamabad, June 7, 2012: The USAID Power Distribution Program today held a workshop for DISCOs on Cost of Service and tariff design. This workshop is a continuation of a series of capacity-building workshops through which the Power Distribution Program is providing training to DISCO employees in conducting Cost of Service (CoS) studies as well as providing guidance on tariff setting principles.
The aim of the workshop was to discuss the CoS Model prepared by the USAID Power Distribution Program in close collaboration with DISCOs. This model calculates the total costs incurred by a DISCO and allocates them to different customer segments in order to calculate the appropriate level of electricity rates. It is expected that with the aid of this model, DISCOs will be able to calculate their category-wise costs of providing services through a globally accepted methodology, which will standardize the rate setting process and lead to cost reflective tariffs. Implementation of the CoS methodology will result in ending intra-category cross-subsidization and reducing the overall subsidy provided by the government.
“Our main objective is to assist DISCOs in improving their performance and efficiency, therefore CoS and tariff design shall help in achieving our objectives and DISCOs will be capable to work out appropriate tariffs for consumers,” said Saleem Arif, Deputy Chief of Party of the USAID Power Distribution Program on the occasion.
Officials from Ministry of Water and Power, National Electric Power Regularity Authority (NEPRA) and power distribution companies attended the workshop.
USAID’s Power Distribution Program is a three-year, USAID-funded program aimed at working jointly with government-owned DISCOs in Pakistan to improve their performance in terms of reduction in losses, and improvement in revenues and customer services, to bring them to the level of well-run utilities in other progressive countries. Through this program, the United States Government provides assistance and support to the Government of Pakistan in its efforts to reform the power sector to end the current energy crisis. http://pdip.pk