ISLAMABAD: The K-Electric (KE) has sought Power Division’s support in achieving an amicable resolution to the issue of historic receivables and payables between the power utility company and government entities through the ongoing mediation proceedings and to expedite the process of pending tariff determinations.
Syed Moonis Abdullah Alvi, Chief Executive Officer (CEO) KE, in a letter to Secretary Power Division, Rashid Langrial, referred to subject “payment to CPPA-G under Power Purchase Agency Agreement (PPAA) executed between KE and CPPA-G” in January 2024, emphasizing that honoring its obligations under the PPAA since January 2024, the KE has paid Rs 51.5 billion on account of power purchases from CPPA-G in accordance with the PPAA, which is a testament to the KE’s commitment to foster liquidity and sustainability in the power sector.
He also highlighted that these payments have been made despite the fact that the KE’s Tariff Differential Subsidy (TDS) claims for the same period are pending due to pending finalization of its Multi-Year Tariff (MYT), which has a consequential impact on the KE’s liquidity and working capital position.
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According to the CEO KE remains in continuous engagement with the Nepra to expedite the process for determination of its MYT, requesting the Power Division for their support in this respect. He said that timely determination of tariff and consequential release of KE’s TDS claims in accordance with the TDS Agreement executed between KE and the Government of Pakistan would be critical to continue honoring its payment obligations under the PPAA.
“As key stakeholders of the power sector, we would like to reiterate our commitment to play our role in enabling a liquid and sustainable power sector, which remain critical for economic stability of country and also request Power Division’s support in achieving an amicable resolution to the issue of historic receivables and payables,” Alvi maintained.
Prime Minister Shehbaz Sharif directed the Power Division to present a holistic solution for settlement of historic receivables and payments between K-Electric (KE) and government entities/departments.
He issued these directions at a recent meeting wherein different issues of power sector came under discussion.
The Power Division and Cabinet Division, which is under the administrative control of the Nepra, will cooperate with the latter for early tariff and settlement of claims of the KE. The Nepra has announced hearing dates on tariffs of the KE.
Power utility company’s Multi-Year Tariff (MYT) expired on June 30, 2023, and the KE has filed tariff petitions for the next control period with the Nepra.
The Nepra is scheduled to hold public hearings this week on KE’s MYT for determination of tariff for supplier business for the period 2023-24 to FY 2029-30. The Regulator has also issued notices for hearing on MTY petition of KY for determination of transmission tariff for the period from FY 2023-24 to 2029-30.
Copyright Business Recorder, 2024
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