PM for resolution of PD-Nepra ‘disputes’ ahead of approval of ‘wheeling policy’

ISLAMABAD: Prime Minister Imran Khan has directed Power Division to sit with National Electric Power Regulatory Authority (Nepra) and resolve their outstanding issues so that ‘wheeling policy’ is approved and announced next month (February 2022), well informed sources told Business Recorder.

Prime Minister issued these directions at meeting on Energy Roadmap, held on January 24, 2022, in which different issues related to the country’s energy sector were discussed.

Following the Prime Minister’s directives, Power Division, led by Secretary Power Asif Hyder Shah, Additional Secretary -1, Musaddiq Ahmed Khan and other officials met Chairman Nepra and discussed the way out of current issues including resolution of wheeling charge of Rs 1.8 per unit approved by Nepra.

During discussion on power sector related issues, it was noted that introduction of ‘wheeling’ is missing, which is necessary before the launch of Competitive Trading Bilateral Contracts Market (CTBCM).

The sources said, CTBCM design is complex and will take 5-7 years to become operational and will be applicable to grid-connected entities.

However, wheeling can be introduced earlier in phase-1 and will be required for non-grid connected entities wanting to enter into bilateral agreements.

It was urged that stay orders given by Islamabad High Court (IHC) to nine power Distribution Companies (Discos) need to be vacated.

On basis of AT&C losses: PD accused of carrying out loadshedding

According to sources, the meeting also noted that there is no mention of any plan to reduce capacity payments after introduction of CTBCM in May 2022.

It was assumed that one possibility could be that the government may consider invoking the generation licences clause of IPPs where they agreed to consider moving to “take and pay” in “good faith” (Article 7 “Competitive Trading Arrangements” of generation licence).

The meeting deliberated on this issue and maintained that the government may consider approaching the Supreme Court to get a decision.

It was also noted that no mention was made of attracting private sector investment in transmission network or reduction of T&D losses which are 17 per cent and ABC cables.

No work was also undertaken on two other factors, i.e., improvement of Discos’ performance and SCADA for improved monitoring of plant availability and energy sold.

Prime Minister also directed Law Division to furnish its advice on clarification sought by Petroleum Division for capacity enhancement of Pakistan Gas Port Consortium Limited (PGPCL) terminal in the light of on-going arbitration.

Petroleum Division, sources said, has been directed to finalize Facilitation Agreement (FA) on North-South pipeline to be finalized by 1st week of February 2022. Petroleum Division has been asked to follow up with Russian side.

Petroleum Division in coordination with the office of Attorney General for Pakistan would pursue court cases on exploration blocks for early vacation of stays/ conclusion. A list shall be shared with AG Office and a copy sent to Prime Minister Office (PMO).

Prime Minister has also directed Power Division and Petroleum Division to update their roadmaps presented in the light of observations of the PMO and come up with an action plan with specific targets/ tasks and timelines for their implementation. These will form part of their performance deliveries.

During discussion on petroleum sector issues, it was noted with concern that no targets were given for increasing domestic gas/ petroleum production as local gas production declined by 2 per cent last year whereas local petroleum, production reduced by 1.5 per cent last year.

The meeting also noted that no target for reduction in UFG, cost of gas has been fixed by the Petroleum Division.

According to sources there was also no mention of setting up land facilities for LNG/ Petroleum to avoid the issue of supply chain disruptions if a ship is delayed. Also having storage facilities will allow companies to buy when prices are low and store them for use when prices go up.

Copyright Business Recorder, 2022