Setting up of provincial regulators: Nepra chief gives his consent

ISLAMABAD: Chair-man, National Electric Power Regulatory Authority (Nepra) on Tuesday gave his consent to the establishment of power regulators at the provincial level for provision of better service to people and resolution of electricity issues.

He made these remarks during a hearing on issuance of transmission licence to Khyber Pakhtunkhwa Transmission Grid Company (KP-PGC) which the provincial government intends to establish with its own transmission and grid system to supply electricity it has generated, mostly cheap hydel electricity to its industry and people. The provincial government argued that National Transmission and Dispatch Company (NTDC) has failed to complete its projects in time due to which its hydel energy projects are not being given preference.

The provincial government was represented by Hamayat Ullah Khan, Advisor to Chief Minister KP on Energy, who gave plenty of reasons for setting up provincial transmission and grid company including supply of cheap electricity to industry, which operates at 16 to 20 per cent disadvantage vis-a-vis industry in Karachi and Punjab due to longer distance. The provincial transmission line and grid company plans to construct, operate and maintain / lay transmission lines of 500, 220 and 132 KV and grid stations.

“If Hamayat Khan brings application for establishment of power regulator at provincial level, Nepra would be more than happy to facilitate it as we will not consider it a competitor, rather, we will say that our younger brother will be in province to look after power sector affairs locally,” said, Chairman NEPRA, Tauseef.H. Farooqi.

The Nepra Chief further stated that he sees this move positively not negatively, adding that if a regulator at a provincial level does what Nepra is doing, it will strengthen its hands. He cited the example of the US and India where provincial/State regulators are managing such things, adding that a central regulator issues guidelines and provincial regulators perform as per those guidelines.

A journalist asked if the KP government plans to set up its own power regulator, then why not transfer the entire power distribution system to the provinces, Chairman NEPRA stated that “a lot is happening at the government level.”

Advisor to CM KP, however, clarified that presently the provincial government has no plan to establish its own regulator.

Barrister Asghar Khan, legal counsel for the KP-PGC, informed the Authority that the transmission lines will be for evacuation and transmission of power from and through the following regions: (i) Dir and Chitral;(ii) Swat;(iii) Kohistan;(iv) Mansehra;(v) Dera Ismail Khan and ;(vi) Special Economic Zones. The total power generation to be evacuated is 7539 MW of which surplus power will be exported to the national grid, Balochistan and even Central Asia when CASA projects are completed. The KP-PGC is envisaging investment of approximately $ 800 million in the transmission and grid infrastructure in various phases. The tariff will be based on Use of System (UoS) charges.

He shared the entire legal aspects related to the proposed transmission and grid company and responded to queries raised by NTDC and NEPRA teams.

The term of the licence of KP PGC will be for 30 years and allow evacuation and transmission of power from private generation, provincial and federal projects etc.

The issue of shifting of industry from Punjab to KP due to cheaper electricity, comparison of prices of wheat in Punjab and KP, provision of power to CPEC projects, and other subjects also came under discussion between the Chairman NEPRA and the Advisor to CMKP.

During the course of hearing, the Chairman NEPRA, the Member Sindh, the Member Balochistan and the Member KP raised different questions on the capability and capacity of the proposed KP-PGC and its business plan.

On business plan, the representatives of KP-PGC failed to satisfy the Authority, after which Hamayat Ullah Khan entered the discussion.

Initially, he complained that NTDC has not treated provincial projects fairly. He also expressed astonishment to learn that the representatives of NTDC present in the meeting opposed transmission to KP-PGC since it was decided at the highest level that NTDC will not oppose it. This may be the reason, the acting Managing Director NTDC did not attend the meeting as his colleague informed the Authority he was attending a meeting on CPEC.

His absence from the hearing, however, made the chairman NEPRA angry, who noted that NTDC has lost 50 per cent of its case due to absence of its Managing Director.

“We are not happy at the absence of MD NTDC and they have lost their case,” Chairman Nepra added.

The legal counsel for the NTDC, Barrister Hamza Randhawa, in his arguments built the case that his organization is not opposing the KP-PGC proposal as according to the law provinces have the authority to establish their own companies but this matter is linked to the National Power Policy, which is yet to be approved by the Council of Common Interests (CCI). He said 6000 cases related to Right of Way (RoW), etc, are pending in courts across the country. However, a representative of NTDC, Mr. Waseem, stated that NTDC is not opposing the KP-PGC but pointing out that legal requirements should be met to avoid issues in future.

The Authority was told that Asian Development Bank and the World Bank are funding the projects, the however, provincial government will extend its share through Special Purpose Vehicle (SPV) company.

“There should be a competitive environment for both KP-PGC and NTDC. People in NTDC should also wake up now to competition as with establishment of KP-PGC, NTDC will also have to perform as over the years it has been noted that there is sluggishness at its end and now it will stand on its own feet after a competitive company is also in the field,” he maintained.

As a as a feasibility study is concerned, he said, solutions of feasibility will be same as are with NTDC but KP-PGC can perform better with respect to implementation, adding that most of the issues in hydel projects are related to Right of Way (RoW) and provincial company can resolve those issues easily. NTDC is already providing technical support to the hydel projects and will also extend transmission lines as KP-PGC does not have sufficient capability especially in heavy transmission lines.

Waseem further stated that generation of 7539 MW should also be part of Indicative Generation Capacity Expansion Plan (IGCEP) as the country has to move towards least cost generation plan.

He further stated the despatch of power plants will be central through system operator. However, those plants which will be on 1100 KV or in remote areas, the company will be responsible for despatch according to its own plan.

The representative of CPPA-G also shared the views on the proposed licence for the provincial transmission and grid company.

Wrapping up the hearing which continued for over two hours the Chairman Nepra assured the NTDC that it would also be given the right to compete with KP-PGC in provincial projects.

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