To raise tariffs, govt looking to snatch autonomy of regulators

May give their control to relevant ministries for failing to comply with orders

ISLAMABAD: The government looks set to clip the wings of energy-sector regulators - the National Electric Power Regulatory Authority (Nepra) and the Oil and Gas Regulatory Authority (Ogra) - and bring them under the control of two relevant ministries, officials say.

It is going to take the step after resistance from the two regulators to pass the impact of power and gas theft on to honest consumers that are paying their bills regularly.

“Now the Cabinet Committee on Energy has given directives for presenting a summary to the Council of Common Interests (CCI) to give control of the regulators to the Ministry of Water and Power and the Ministry of Petroleum,” an official said.

“This will force them (regulators) to implement decisions of the government; in this regard, the federal government wants to take the four provinces on board.”

At present, Nepra and Ogra are working under supervision of the Cabinet Division.

The Pakistan Peoples Party (PPP) government, during its tenure from 2008 to 2013, had also tried to implement a similar plan but could not succeed. Water and Power Secretary Younus Dagha, in a meeting of the Cabinet Committee on Energy on August 30, argued that Nepra as a regulator was not performing its duties according to the mandate, which would have adverse implications for the power sector.

He suggested making amendments to the Nepra Act to make government’s directives binding on the regulatory authority.

A committee, headed by Ashtar Ausaf and constituted in 2015, had also proposed that Nepra and Ogra may be placed under the supervision of relevant ministries.

It was suggested in the meeting that matters related to all regulatory authorities established under the federal law were included in the federal legislative list part-2, which came within the CCI domain, therefore, the proposed amendments to the Nepra Act should be submitted to the CCI.

The Ministry of Water and Power proposed the removal of all licensing requirements for electricity generation restricted to the grid connectivity. It called for providing the power market with a multiple buyers’ model and suggested establishing a tribunal.

In an earlier meeting chaired by Prime Minister Nawaz Sharif on February 22, 2016, Dagha claimed that the power-sector regulator was delaying public-sector projects and asked the premier to make amendments to the Nepra Act to clearly set out its role and responsibility.

He suggested that the federal government should frame a national electric policy in consultation with the provincial governments and prepare strategic plans to empower itself to issue policy guidelines to Nepra for handling the urgent issues being faced by the government.

He also pointed to limitations of the current legal framework called the Regulation of Generation, Transmission and Distribution of Electric Power Act 1997, under which Nepra worked.

He described the Act as vague as far as relations of the federal government with the regulator were concerned.

Published in The Express Tribune, September 25^th, 2016.

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