Iran's power industry needs new funding and investment to continue its expansion program but is facing serious challenges, the managing director of Iran Power Generation, Distribution and Transmission Company (Tavanir) said.
According to law, subscribes are charged a certain amount as tax in their electricity bills, which in its entirety must be spent on developing renewable sources of energy and expanding power infrastructure in rural areas, Mohammad Hassan Motevallizadeh said.
“That money now goes directly to the treasury and the Management and Planning Organization is responsible for transferring it to the Energy Ministry…But it (MPO) spends part of the money elsewhere,” Afkar News quoted him as saying.
It was not clear on the basis of which laws, rules, regulations or orders the powerful organization was diverting development funds critical for the key power industry.
This has delayed several projects as the contractors (both state and private) have not been paid. “Since the start of the current year in March, over $100 million should have been allocated to the power industry,” the senior official complained.
Referring to the budget bill for the next fiscal (March 2019-20), which was submitted to the parliament by the MPO at the weekend, Motevallizadeh said, “Our main demand from the new budget is that the money which is taken from consumers as tax be paid directly to the Energy Ministry”.
The MPO’s inability or unwillingness to fulfill its financial commitments to private firms has discouraged companies from working for the power sector.
Many private firms have not been paid for the electricity they sold long ago to the government and have stopped working.
Another issue the Tavanir boss pointed out is the low electricity tariffs, which has encouraged many, especially in the agriculture sector, to use electricity in an irresponsible manner.
Higher electricity tariffs for those who exceed reasonable consumption limits are the most effective way of convincing the public to consume prudently. Environmentalists and economic experts say here must be a tangible difference between electricity tariffs so that the people feel the necessity to use power logically and avoid waste by putting off the lights.
The Energy Ministry has suggested increasing electricity tariffs for heavy consumers. The proposal has been approved by the Majlis special commissions and if ratified by the government, it will come into effect next year.
