National Electric Power Regulatory Authority (Nepra) on Friday turned down a petition of Karachi Electric Supply Company (KESC) for 45 paisa per unit increase in the tariff under the monthly fuel adjustment mechanism and instead decided to serve a show cause notice to the power utility for not operating its plants at full capacity.
The regulator, which the analysts maintain is not independent in taking tariff-related decisions, took this decision at a time when the Ministry of Water and Power’s top basses i.e. Federal Minister for Water and Power, Khawaja Muhammad Asif and Minister of State for Water and Power, Chaudhry Abid Sher Ali are criticising KESC for allegedly taking more than 650 MW power from the national grid in violation of the agreement. KESC has always refuted the government’s claim, saying that the utility never violated the power purchase agreement.
During the hearing of KESC’s tariff petition for an increase of 45 paisa per unit for October 2013, Vice Chairman Nepra, Khawaja Muhammad Naeem, who is said to be a close relative of Minister for Water and Power, Khawaja Muhamamd Asif observed that the power utility did not generate enough power from its own thermal power plants, acquiring low cost power from the NTDC and selling at higher prices to its consumers, which was a blatant violation of the agreement.
“KESC violated rules and regulations by not operating its own power plants at full capacity which implies that the utility is trying to create a national crisis in the country. This situation is not acceptable to the regulator,” he added. Nepra claims that KESC is violating its power purchase agreement with the National Transmission and Dispatch Company (NTDC). Nepra also claimed that KESC did not ask the IPPs i.e. Gul Ahmad and Tapal to operate at full capacity as their electricity is more expensive than electricity being purchased from NTDC.
Vice Chairman further stated that he had directed Nepra authorities to file an application in the court with a request that the decision on status quo may be expedited. One of the KESC’s officials told Business Recorder that Nepra had deferred October FSA and asked for more details from KESC and NTDC. KESC official argued that KESC never obtained extra power from national grid in violation of agreement. “For instance, if KESC gets more electricity than its quota of 650 MW why did NTDC not penalise the utility in accordance with the agreement,” he questioned.
Source: Recorder Report