K-P seeks to sell power to Centre at revised rates

Will push for signing long-delayed power purchase deals

PESHAWAR: The Khyber-Pakhtunkhwa (K-P) government will push the federal government to sign power-purchase agreements at revised rates for its new hydel power projects in the Inter-Provincial Coordination Committee (IPCC) meeting scheduled to be held in Islamabad on Tuesday (today).

The provincial government is also expected to take up a number of unresolved issues during the meeting.

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Officials privy to recent developments said that the chief minister and newly-appointed chief secretary, who are expected to attend the meeting, have already been briefed by departments concerned.

They said that power purchase agreements would be sought for the already-completed 18-megawatt Pehur hydro-power project and 2.6-megawatt Machai project, 17-megawatt Ranolia project and 36.6-megawatt Daral Khwar project (which is near completion).

“If the federal government does not sign power-purchase agreements, it will affect these cheap and eco-friendly energy generation projects. We have other sources to finance our hydel energy projects,” said a senior official.

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According to official documents, the Pehur power project has been injecting power to national grid since March 2010 while March 1, 2010 is the date for commencement of its commercial operation.

It is connected with the national grid via a 132KV grid station set up at Gadoon Amazai in Swabi.

The power purchase agreement for this electricity project has been pending for more than six years.

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The federal government, it is learnt, is buying power at an interim rate of Rs1.0 per kilowatt hour. Tariff determined for Pehur by the National Electric Power Regulatory Authority was set at Rs4.018/kWh on December 6, 2010. However, the rates cannot go into effect until the power purchase agreement was signed.

“The federal government owes us Rs1.5 billion in arrears of the Pehur HPP as of August this year,” said an official.

The official said that Machai and Ranolia power projects were completed in March and June this year, respectively, while Daral Khwar would be completed by mid-October this year.

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“The federal government has to be requested to start the process (for signing new contracts),” the official said.

Delay in NHP payment

The K-P government is also expected to raise the matter of the delay in the payment of Net Hydel Profit (NHP) by the federal government.

According to the provincial finance department, the federal government had not yet paid arrears amounting to Rs16.827 billion for the previous year and nothing had been released for the current fiscal year.

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According to an MOU signed in February last year, the Centre agreed to pay Rs70 billion as NHP arrears in four instalments over a four-year term while the NHP rate was agreed at Rs1.1 per kilowatt-hour.

Under that agreement, the federal government had to pay Rs33.7 billion, including annual net hydel profit and arrears but the federal government only released Rs16.8 billion.

The remaining Rs16.8 billion is still outstanding.

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Khyber-Pakhtunkhwa would push the federal government to release the annual amount owed by the federal government in net hydel profit and arrears for the previous year.

The K-P government also wants access to the oil and gas well-head operations in the province for determining the exact amount of royalty on energy resources generated in the province.

The K-P government wants to install check-meters at all well-heads in the province.

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Moreover, the K-P government would also raise the issue of input-adjustment of sales tax on goods and services levied by the Centre and K-P government, respectively.

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“The FBR signed MOUs for input adjustment with other provinces three years before it did with the K-P, thus we were deprived of revenue for three consecutive years amounting to Rs9.56 billion,” said Shahnawaz Khan, an additional collector at KPRA.

The provincial government would also discuss the issue of electricity duty during the meeting.

Officials maintained that the federal and provincial governments could devise a mechanism for the payment of outstanding dues and regular payment of the electricity duty.