Nepra's tariff on Thar coal power: Sindh may seek ECC intervention

The Sindh government has indicated that it would seek justice on controversial tariff determined by National Electric Power Regulatory Authority (Nepra) from the Economic Coordination Committee (ECC) of the cabinet, headed by the caretaker Prime Minister Muhammedmian Soomro pertaining to Thar coal power projects, official sources told Business Recorder here on Wednesday.
THE PROVINCIAL GOVT ALSO EXPRESSES ITS DISAGREEMENT WITH THE UPFRONT TARIFF, DETERMINED BY NEPRA FOR WIND ENERGY PROJECTS: "The tariff determination of 7.8 cents per kWh is not acceptable to Sindh, and we would like to plead our case in the ECC," said Abdul Hamid Akhund, secretary, Sindh Mines and Minerals Development, in a letter to the federal government.
Sindh Caretaker Chief Minister Abdul Qadir Halepota has already supplemented the view of his province in a letter to the caretaker prime minister, alleging that federal regulatory agencies have not been supportive, on the contrary, frivolous impediments were being created in allowing a realistic upfront tariff which was necessary to attract investment in coal power projects.
The provincial government also expressed its disagreement with the upfront tariff, determined by Nepra for wind energy projects, being processed by the Alternative Energy Development Board (AEDB) causing an additional burden on the national exchequer.
"Erroneous approach was adopted in the case of wind energy upfront tariff as ground realities like pricing of equipment was not worked out in accordance with the market," the sources quoted Akhund as saying.
The regulator has reportedly based its calculations on lignite coal costing $40 per tonne and claimed the efficiency level for dry coal whereas as additional cost of $40 was required for securing one tonne dry coal as Thar coal has 48 percent water.
This means that two tonnes watered-coal would be required to obtain one tonne of dry coal, costing $80 per tonne which has conveniently been avoided. The residual fuel oil has been worked out at $1.2 million per megawatt which was not practical, the provincial government opined.
While citing what happened at a meeting chaired by the water and power minister on January 12 in Islamabad, Abdul Hamid Akhund claimed that neither the Nepra chairman had turned up nor were the assumptions of Sindh representative discussed.
At the meeting, Nepra representative was informed that their comparisons needed to be made on rational basis and different projects warrant different assessments and there was no link between Pakistan and India. "India's case cannot be quoted as they have the capacity to do their EPC and manufacture their own equipment.