ISLAMABAD: Chairman National Electric Power Regulatory Authority (Nepra) Waseem Mukhtar has reportedly supported write-offs of over Rs 60 billion of K-Electric, saying that since Discos are government-owned, this loss is parked in the circular debt or is ultimately received from the consumers through the imposition of a surcharge, well informed sources told Business Recorder.
He shared these thoughts at a meeting held at the level of SIFC meant to resolve the longstanding issues of K-Electric.
CEO K-Electric, Syed Moonis Abdullah Alvi informed the participants that after extensive deliberations and with the efforts of stakeholders including Power & Finance Divisions following were approved by the Economic Coordination Committee of the Cabinet (ECC) to resolve the pending disputes between K-Electric (KE) & Government of Pakistan during the Caretaker setup: (i) Power Purchase Agreement (PPA); (ii) Interconnection Agreement (ICA); (iii) Tariff Differential Subsidy (TDS) Agreement; and (iv) Mediation Agreement.
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Talking about write-offs, CEO K-Electric highlighted that the power utility company has filed write-off for pending claims of Rs 68 billion from FY 2017 to FY 2023 duly vetted by the Chartered Accountants (A F Ferguson). However, Nepra is now raising objections regarding the non-availability of CNICs with write-off claims.
Chairman Nepra briefed the meeting that Nepra is evaluating KE’s write-off claims and the Authority is working to resolve the matter at the earliest. The issue of recovery loss is also prevalent in other DISCOs. However, since they are government-owned, this loss is parked in the circular debt or is ultimately received from the consumers through the imposition of a surcharge.
On tariff-post 2023, CEO KE said that power utility company’s Multi-Year Tariff (MYT) expired on June 30, 2023, and KE has filed tariff petitions for the next control period with Nepra. Chairman Nepra noted that they were working on it and assured that the tariff determination process for the period post June 30, 2023 would be expedited.
Sharing details on Indicative Generation Plan for KE, Secretary Power, Rashid Langrial stated that as per directives of the Prime Minister’s Office, KE submitted an Indicative Generation Plan (IGP) that included the following projects: (i) 660 MW JPCL Coal Unit-I after its conversion to 100 percent Thar Coal; (ii) 660 MW JPCL Coal Unit-II based on 100 percent Thar Coal; (iii) new 330 MW Thar Coal Power Project through Competitive Bidding jointly done by PPIB and KE; (iv) 600 MW HUBCO conversion of two (02) units to 100 percent Thar coal; and (v) 1,320 MW Port Qasim Electric Power Company Limited (PQEPCL) conversion to 100 percent Thar Coal and novation of its PPA to KE.
During discussion on government’s representation on KE’s Board of Directors (BoDs), Secretary Power requested to change/substitute the Government of Pakistan board members in KE’s BoDs as the stay order of SHC does not apply to Government of Pakistan board members.
The participants mutually agreed on the following decisions: (i) Nepra to resolve the issues of KE including write-off claims and determination of Tariff post-June 2023; (ii) summary for approval of the CCoE for conversion of Unit-I of JPCL to 100 percent Thar Coal and power off-take by KE; and (iii) KE to assist the shareholders in changing the Government of Pakistan Board Members in KE BoDs.
Copyright Business Recorder, 2024