NEPRA hearing: K-P demands Rs1.1 per unit increase in hydel tariff

If allowed, net hydel profit for the province will soar to Rs18.8b.

ISLAMABAD: The Khyber-Pakhtunkhwa (K-P) government has asked the National Electric Power Regulatory Authority (Nepra) to allow an increase of Rs1.10 per unit in hydroelectric power tariff on account of net hydel profit/water use charges to increase the share of provinces in Wapda’s tariff.

The K-P government extended the support in a public hearing chaired by Nepra Chairman Tariq Sadozai here on Tuesday.

The Water and Power Development Authority (Wapda) had sought an increase of Rs2.11 per unit in hydroelectric power tariff from Rs1.74 per unit in 2013-14 to Rs3.85 per unit for 2015-16 in order to recover Rs122 billion from the consumers.

Senior Wapda executive Anwarul Haque told Nepra that the utility used to pay Rs6 billion per year to K-P under a 1991 formula and was instructed by the Ministry of Water and Power to collect Rs1.10 per unit from the consumers for paying net hydel profit/ water use charges to the provinces and Azad Jammu and Kashmir.

Accordingly, the share of K-P would increase to Rs18.8 billion from Rs6 billion while Punjab and AJK would start getting Rs9.5 billion and Rs6.5 billion on the basis of Rs1.10 per unit net hydel profit/water use cost.

He said Wapda was not aware of the basis of this cost, but this would require the authority to collect revenues of Rs35 billion during 2015-16.

K-P Chief Minister Pervez Khattak told Nepra that the province supported the tariff petition seeking recovery of Rs1.10 per unit in net hydel profit from the consumers.

Nepra was hearing the Wapda’s request for upfront tariff for 2015-16 to meet its revenue and development budget needs. All four provincial members were present on the occasion. An intervener, Azhar Masud Panni, told the regulator that the imposition of this cost on the consumers without approval of the Council of Common Interests (CCI) would be unlawful.



K-P member of Nepra, Hamayatullah Khan, asked how the AJK could be treated like a province in the matter of Rs1.10 per unit charge when the territory was outside the jurisdiction of the Constitution of Pakistan and was not covered by the Nepra Act.

He was told that Nepra had approved electricity contribution from the Mangla project, which was supplying 1,000 megawatts of electricity to the national grid and more projects like Neelum Jhelum hydropower project were coming up in the territory.

It was stated that it would be highly unfair and unjustified to draw economic benefits from the AJK through legal means and deny it water use charges that could have gone to any other entity if the Mangla Dam was only 10 km downstream. Talking to media after the hearing, K-P Chief Minister Pervez Khattak said the federal government should increase the province’s net hydel profit from Rs6 billion to Rs18 billion.

He said the federal government was to pay Rs44 billion in net hydel profit and demanded payment of Rs57 billion in mark-up on hydel profit due to delay. He said Water and Power Minister Khawaja Muhammad Asif had agreed three months ago to pay the money and called for taking up the matter with the CCI as per an agreement.

Published in The Express Tribune, September 9^th,  2015.

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