K-P’s hydel profit increases three-fold
NEPRA increases bulk supply tariff by Rs0.27 per unit
NEPRA increases bulk supply tariff by Rs0.27 per unit. PHOTO: FILE
PESHAWAR/ISLAMABAD:
The top power regulatory body on Friday raised the bulk supply tariff for hydroelectric power by Rs0.27 per unit for fiscal year 2015-16, in a move that would see Khyber-Pakhtunkhwa’s share of hydel profit triple to Rs18.70 billion per year.
The new tariff was announced nearly six months after the Water and Power Development Authority (Wapda) had filed a petition with the National Electric Power Regulatory Authority (Nepra) to determine hydel power tariff for 2015-16 based on the former’s revenue requirements and gaps.
Hydroelectric power plant: Financiers stop $433m loan for Neelum-Jhelum project
Wapda had requested that the power tariff be increased by Rs2.11 to Rs3.85 per kilowatt-hour (kWh) so that it could raise revenues of Rs122.552 billion. However, the authority found that some of the calculations by Wapda were inflated and rationalised the revenue estimations to raise the current tariff by Rs0.27 from Rs1.74 to Rs2.01 for bulk supply to the National Transmission and Dispatch Company (NTDC), allowing it to raise revenues of Rs63.81 billion.
In its determination, Nepra allowed Wapda to recover Rs43 billion to procure land and some construction of the Dasu hydropower project, nearly half of the Rs85 billion that Wapda had requested.
The power regulator also allowed Wapda to recover Rs27.60 billion out of the Rs86 billion it had pencilled in for the Diamer-Bhasha dam. Pleas to recover money for smaller power projects were rejected, though Rs10.44 billion were approved for Wapda to maintain and repair operational projects.
China firm offers $50b for hydro projects
Nepra also allowed Wapda Rs159 million in Irsa surcharge and Rs899 million for water use charge (WUC).
K-P to get Rs18.7b
After a struggle of more than two decades the Khyber Pakhtunkhwa government has succeeded in getting the power regulator to uncap the Net Hydel Profit (NHP) which would see its share from Wapda triple.
In 1991, the government had approved a temporary measure under the Kazi Committee formula for Wapda to pay the then NWFP authorities an ad-hoc Rs6 billion per year as their share of profits from sale of hydel power. However, the K-P government argued that this share needs to increase based on agreed rate.
Plans for building dams scuppered by lack of will
Nepra observed that this time, Wapda’s revenue requirements had been calculated using the K-P’s NHP rate of Rs1.10 kWh on the request of water and power minister, listing K-P’s NHP payments at Rs18.810 billion. Hence, it decided to provisionally uncap the NHP at the rate of Rs1.10 per kWh with a five per cent annual indexation for Wapda’s hydel power stations in K-P.
Accounting for projected generation of 17,004 gigawatt-hour (gWh)from hydel power stations in K-P, Wapda would be liable to pay the province Rs18.704 billion in 2015-16.
However, the rates would only be applicable to K-P, and to determine NHP rates for other provinces, Wapda would have to approach the Council of Common Interests for a permanent solution to the matter.
We need dams
The new rates for NHP determination only applies to K-P while the rest of the provinces have been told to approach Council of Common Interest for resolution of their NHP issue.
Warsak dam falls in K-P
Nepra also cleared the issue of where do Gomal Zam Hydel Power Station (GZHPS) and Warsak Hydel Power Station (WHPS) fall, and hence determination of their NHP payments.
It determined that the GZHPS is located in South Waziristan Agency therefore, it does not fall in K-P so NHP payments cannot be calculated for K-P.
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On the other hand, it determined that WHPS falls in K-P, hence its power generation and NHP calculations should be included in the province.
Huge achievement
The K-P government called Nepra’s decision ‘a huge achievement’.
“It is a huge achievement in the history of the province,” said K-P Minister for Energy and Power Atif Khan, adding that K-P chief minister was the only CM to have ever attended Nepra meetings.
“Since Nepra has announced its decision now, I don’t think the federal government will stall on releasing the money to K-P at the new rates,” a government official said on the condition of anonymity.
Published in The Express Tribune, November 14th, 2015.
The top power regulatory body on Friday raised the bulk supply tariff for hydroelectric power by Rs0.27 per unit for fiscal year 2015-16, in a move that would see Khyber-Pakhtunkhwa’s share of hydel profit triple to Rs18.70 billion per year.
The new tariff was announced nearly six months after the Water and Power Development Authority (Wapda) had filed a petition with the National Electric Power Regulatory Authority (Nepra) to determine hydel power tariff for 2015-16 based on the former’s revenue requirements and gaps.
Hydroelectric power plant: Financiers stop $433m loan for Neelum-Jhelum project
Wapda had requested that the power tariff be increased by Rs2.11 to Rs3.85 per kilowatt-hour (kWh) so that it could raise revenues of Rs122.552 billion. However, the authority found that some of the calculations by Wapda were inflated and rationalised the revenue estimations to raise the current tariff by Rs0.27 from Rs1.74 to Rs2.01 for bulk supply to the National Transmission and Dispatch Company (NTDC), allowing it to raise revenues of Rs63.81 billion.
In its determination, Nepra allowed Wapda to recover Rs43 billion to procure land and some construction of the Dasu hydropower project, nearly half of the Rs85 billion that Wapda had requested.
The power regulator also allowed Wapda to recover Rs27.60 billion out of the Rs86 billion it had pencilled in for the Diamer-Bhasha dam. Pleas to recover money for smaller power projects were rejected, though Rs10.44 billion were approved for Wapda to maintain and repair operational projects.
China firm offers $50b for hydro projects
Nepra also allowed Wapda Rs159 million in Irsa surcharge and Rs899 million for water use charge (WUC).
K-P to get Rs18.7b
After a struggle of more than two decades the Khyber Pakhtunkhwa government has succeeded in getting the power regulator to uncap the Net Hydel Profit (NHP) which would see its share from Wapda triple.
In 1991, the government had approved a temporary measure under the Kazi Committee formula for Wapda to pay the then NWFP authorities an ad-hoc Rs6 billion per year as their share of profits from sale of hydel power. However, the K-P government argued that this share needs to increase based on agreed rate.
Plans for building dams scuppered by lack of will
Nepra observed that this time, Wapda’s revenue requirements had been calculated using the K-P’s NHP rate of Rs1.10 kWh on the request of water and power minister, listing K-P’s NHP payments at Rs18.810 billion. Hence, it decided to provisionally uncap the NHP at the rate of Rs1.10 per kWh with a five per cent annual indexation for Wapda’s hydel power stations in K-P.
Accounting for projected generation of 17,004 gigawatt-hour (gWh)from hydel power stations in K-P, Wapda would be liable to pay the province Rs18.704 billion in 2015-16.
However, the rates would only be applicable to K-P, and to determine NHP rates for other provinces, Wapda would have to approach the Council of Common Interests for a permanent solution to the matter.
We need dams
The new rates for NHP determination only applies to K-P while the rest of the provinces have been told to approach Council of Common Interest for resolution of their NHP issue.
Warsak dam falls in K-P
Nepra also cleared the issue of where do Gomal Zam Hydel Power Station (GZHPS) and Warsak Hydel Power Station (WHPS) fall, and hence determination of their NHP payments.
It determined that the GZHPS is located in South Waziristan Agency therefore, it does not fall in K-P so NHP payments cannot be calculated for K-P.
10 firms, ventures express desire to build Dasu dam
On the other hand, it determined that WHPS falls in K-P, hence its power generation and NHP calculations should be included in the province.
Huge achievement
The K-P government called Nepra’s decision ‘a huge achievement’.
“It is a huge achievement in the history of the province,” said K-P Minister for Energy and Power Atif Khan, adding that K-P chief minister was the only CM to have ever attended Nepra meetings.
“Since Nepra has announced its decision now, I don’t think the federal government will stall on releasing the money to K-P at the new rates,” a government official said on the condition of anonymity.
Published in The Express Tribune, November 14th, 2015.