K-P, Punjab seek Centre’s nod to sell power at higher tariff

Published: October 12, 2017
Energy transmission line. PHOTO: REUTERS

Energy transmission line. PHOTO: REUTERS

ISLAMABAD: Khyber-Pakhtunkhwa (K-P) and Punjab have protested over delay in signing of power purchase agreements as they are supplying electricity from hydel power projects at the old and lowest tariff.

They have asked the central government to allow them to charge a higher electricity price.

At present, the Water and Power Development Authority is receiving Rs2.17 per unit as hydroelectric power tariff excluding levies and taxes. The tariff rate along with levies and net hydel profit goes up to Rs4.05 per unit.

Punjab backs K-P’s protest over Rs4b deduction in power bills

The issues of delay in power purchase agreements and hydel electricity supply to the national grid at the lowest rate came up for discussion in a meeting among provinces last month.

K-P Chief Minister Pervez Khattak requested the federal government to resolve the issue and said the Central Power Purchasing Agency-Guarantee (CPPA-G) should immediately sign power purchase agreements in line with a recent decision of the National Electric Power Regulatory Authority (Nepra).

He emphasised that CPPA-G should pay the outstanding energy cost of Rs1.227 billion and it should also sign power purchase agreements for Machia, Ronalia and Daral Khwar hydroelectric power projects.

Khattak pointed out that Pehur Power Station had been connected to the national grid and it had been supplying electricity to Peshawar Electric Supply Company (Pesco) since 2010. However, because of delay in signing of a power purchase agreement with CPPA-G, electricity was being sold at an interim tariff of Rs1 per kilowatt-hour (kwh).

Responding to the arguments, the chief executive officer of CPPA-G revealed that Nepra had sent a power purchase agreement to CPPA-G on August 30, 2017 and it would be signed by October 15.

Punjab finance minister also highlighted similar issues pertaining to the province. The minister requested that Punjab should be treated on a par with K-P in payment of net hydel profit.

K-P demands 390% increase in profit for power supply

As the issues were not part of the agenda, the Punjab government was advised to submit them for discussion in the next meeting. The federal government, however, assured the provinces that it would settle the issues.

Nepra had conducted a public hearing in June this year in response to a petition filed by Wapda that sought a tariff increase of Rs3.61 per unit to bear the additional burden for payment of Rs1.10 per unit net hydel profit to Punjab in order to match K-P’s existing hydel profit. Four months are gone and the regulator has yet to take a decision.

During the hearing, the K-P chief minister demanded an increase in its hydroelectric power profit to Rs5.38 per unit that could proportionately be added to the consumer tariff.

He argued that Nepra was legally bound to allow the tariff increase to Rs5.38 per unit from the existing Rs1.10 without any delay to pave the way for additional revenues of Rs70-80 billion for the province.

Published in The Express Tribune, October 12th, 2017.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

More in Business