PD revising power policy draft

ISLAMABAD: Power Division is reportedly revising the draft of National

Electricity Policy (NEP) in the light of observations made by the provinces including deduction of power receivables at source, well-informed sources told Business Recorder.

Power Division stated that Section 14 (A) of Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Act 2018, states that "the Federal Government shall, from time to time, with the approval of the Council of Common Interests (CCI), prepare and prescribe a National Electricity Policy for development of the power markets".

The Nepra Act, 2018 further provides the contours for the National Electricity Policy, development of systems based on optimal utilization of resources, development of efficient and liquid power market design, integration of national and provincial transmission systems and development of a sustainable renewable energy market. Accordingly, the development of draft National Electricity Policy was initiated taking into account the chronological background of the sectoral policy and regulatory frameworks, earnings and plans of the federal government to ensure provision of secure, sustainable and affordable supply of electricity to the end consumers.

The policy document had evolved through (both intra and cross-sectoral) series of consultations, with the relevant stakeholders. The developments had eventually enabled formulation of draft National Electricity Policy that shall enable all-inclusive development and operations of the power sector on sustainable contours.

The draft policy identified major goals to be achieved and provides overarching policy directives. It also provided the key guiding principle to develop subservient frameworks that would steer the decision-making in the electricity sector to achieve the identified goals.

Following the enactment of National Electricity Policy, the National Electricity Plan shall be formulated that shall enable operationalization of the policy directives. In pursuance of the aforesaid developments leading to the formulation of a refined draft, the same was circulated among the provinces and other stakeholders for comments/inputs in February 2020. Further, a consultative session was also organized by the Power Division on 28th December 2020.

On February 11, 2021, Power Division presented the draft National Electricity Policy after incorporating suggestions, amendments and modifications of the stakeholders for consideration of the Cabinet Commission on Energy (CCoE), which would be placed, in accordance with Article 153 & 154 of the Constitution, read with Federal legislative list part (II) entry (4) Electricity) for approval of the Council of Common Interests. Accordingly, the Power Division requested for approval of CCoE for placement of the policy before the Council of Common Interests.

At the outset of discussion, the Chairman CCoE observed that the strategic framework of the policy includes an integrated energy plan which should be prepared by the Power Division. The Ministry of Planning, Development & Special Initiative shall, however, facilitate in this regard. Afterwards, the policy was discussed in detail with the following observations as made by the CCoE in the light of views/comments by the Provinces: (i) stranded costs of the power sector mentioned in the policy were observed as counterproductive for future investments. In this regard, viable solutions may be explored separately. However, the stranded/past costs must not be part of the policy in order to encourage future investments in the power sector; (ii) in the vision of the policy, the term of liquid market may be not understandable. Therefore, the phrase should be suitably amended to give an impression of a competitive market;(iii) the provision relating to deduction of power receivables at source should be suitably reworded to the extent of the amount only agreed by the provinces, to be adjusted in accordance with the procedure as laid down in the Constitution;(iv) in connection with reducing reliance on imported fuels for the generation mix, the policy focus is on use of local fuels. In this regard, Thar Coal from Sindh may also be indicated; (v) the policy may also focus on reducing load shedding. In this regard, the provincial government shall ensure facilitation in recovery of electricity bills and prevention of theft of electricity and; (vi) all rules/regulations shall be made in such a manner “which shall ensure decentralization of the power sector in order to incentivize devolved generation and distribution in future”.

While continuing the discussion further, the Secretary, Energy Department, government of Sindh observed that the policy should also indicate appropriate measures to ensure water apportionment accord among the provinces while implementing the hydropower projects. In his response, the Chairman CCoE observed that this issue was not relevant to the electricity policy, rather it was IRSA's mandate. He, however, directed the Power Division to ensure that the policy must not contain any provision contravening the interest of the provinces as provided by the Constitution. The Secretary, Power Division, clarified that the policy did not contain any such provision. However, it will be further ensured while revising the draft. After detailed deliberations, the CCoE directed Power Division to revise the draft policy in the light of observations made by the members of CCoE and resubmit it to the CCoE prior to its submission to Cabinet and CCI.

Copyright Business Recorder, 2021