ISLAMABAD: The top brass of power regulator, National Electric Power Regulatory Authority (Nepra), on Thursday disagreed with each other during discussion on “usefulness” of existing Indicative Generation Capacity Expansion Plan 2030, baffling the entire Nepra team and other participants.
This untoward situation was witnessed during a public hearing on positive adjustment of Rs 9.91 per unit in tariffs of power Distribution Companies (Discos) for the month of June 2022 to recover additional amount of Rs 133.5 billion under monthly FCA mechanism.
However, Nepra has agreed to approve an increase of Rs 9.8970 per unit to pass on additional financial burden of Rs 133.3 billion to consumers.
CPPA-G once again pointed out that rebasing of tariff has been delayed. Minister for Power Khurram Dastgir Khan has already stated that it was due in February 2022, which has been delayed. Nepra also approved an increase of Rs 11.37 per unit in tariff of K-Electric for June 2022 under FCA mechanism to recover over Rs 22 billion. The cumulative financial impact of positive adjustments of Discos and KE for June 2022 would be over Rs 155 billion. The main factor for the massive increase in FCA is price and mix variation.
The scuffle between Chairman Nepra, Tauseef H Farooqi and Member NEPRA (Sindh) Rafique Ahmad Shaikh became evident when the latter questioned CEO CPPA-G, Rehan Akhtar for choosing to generate expensive as opposed the cheaper renewable projects.
Rehan Akhtar stated that the government is working on draft Renewable Energy (RE) Plan and work is also under way on a revised IGCEP, which will be presented to the Authority, adding that the total focus of revised IGCEP would be on solar and wind energy.
Member Sindh inquired about the benefit of IGCEP 2030. CEO CPPA-G noted that there was no consolidated energy plan before IGCEP, whose improved version will be unveiled.
IGCEP was launched almost a year ago so what are the benefits of its first version, inquired Member Sindh in his individual capacity. CEO CPPA-G clarified that there was no energy plan in document form and procurements were made in accordance with the first version of this plan. He; however, admitted that there were shortfalls in IGCEP.
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“I admit in personal capacity that there were issues/ problems in the first version,” CEO CPPA-G said adding that now the revised version is on the cards.
When Member Sindh asked again why if there were no benefits associated with IGCEP, it was supported. CEO, CPPA-G responded that there were benefits to IGCEP, adding that it is far better to have a document instead of no document. However, he further stated that now the concerned organizations are improving the document in light of changing environment and based on studies. Member Sindh observed that it is good that CEO CPPA-G had admitted that IGCEP was useless, Chairman NEPRA intervened saying it was a public hearing and such comments should be avoided.
Member Sindh, angered at the intervention of Chairman, stated that he knew it was a public hearing but he can offer personal comments on IGCEP.
Chairman NEPRA commented that IGCEP should be viewed in the same context for which it has been developed instead of seeing it the context of rupee dollar parity or international prices.
“This is first time that neither LoI was presented before the regulator nor any pressure came to forcibly impose it,” Chairman NEPRA said adding that Pakistan is one of many countries across the globe that make plans/ projections for future. He said, the way power sector is being treated in Pakistan in not a correct strategy.
He further contended that for the first time IGCEP was drafted within an engineering and scientific context and its benefits are not being delivered because of two main factors: rupee dollar parity and fuel price are out of control. Sarmad Ehsan of NTDC requested NEPRA not to deduct its claims as the organization is in serious financial crisis, after NTDC deducted Rs 17 billion in the previous year. He said, the company was not in a position to clear liabilities of contractors.
KE team comprising CFO, Aamir Ghaziani and Director Finance, Ayaz Jaffer, replied to the questions and queries raised by Arif Bilwani, Aneel Mumtaz, Muhammad Hanif and Usman Ali including the request to NEPRA to order forensic audit of KE plants.
Tanveer Barry, Chairman public sector utilities, i.e., power and gas subcommittee of KCCI said that KE is generating expensive electricity at the rate of Rs 39.631 per unit and purchasing expensive electricity.
Copyright Business Recorder, 2022
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