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KESC advised to start power generation from its idle units

National Electric Power Regulatory Authority (Nepra) has rejected the KESC-government deal on supply of 350 MW power to the national grid, terming it illegal.

The Authority says that the country will be having a new elected government that will terminate the ongoing supply of electricity of 650 MW to KESC so it would be better for top management of the privatised entity to operate its idle power plants to generate 700 MW.

During the hearing held on January 1, 2013, Nepra was told that the Council of Common Interests (CCI) had accorded approval to put back 350 MWs of electricity in the NTDC system from the 650 MW electricity, which is currently being given to the KESC. Despite the CCI’s clear-cut decision, the KESC has not surrendered 350 MW electricity to the NTDC system.

An official said that KESC is getting an additional 350 MW from the NTDC at the rate of Rs9 per unit and if it surrenders this, it will have to generate the same from its own idle power plants, raising the price to Rs18 per unit.

The regulator was also told that the Ministry of Water and Power had prepared an agreement containing lucrative incentives that were extended to the KESC in 2009. As per the draft, the Ministry of Water and Power will provide 2,000 metric tons furnace oil through the NTDC for the Bin Qasim power plant for which the Ministry of Finance will release Rs4.5 billion in advance. However, the NTDC will be responsible for providing the furnace oil and making payments. The KESC will not bear any such responsibilities. Under the proposed deal with KESC, the Ministry of Finance will be responsible for ensuring the subsidy for the KESC in the first week of every month. The ministry reached an accord with the KESC in 2009 by putting aside the law of the land and extended 650MWs electricity at subsidized rates because of which the KESC closed its power plants with the capacity to generate 700MW electricity.

Member Punjab Khawaja Mohammad Naeem said that if the government is indeed going to cease any agreement, then regulator would never accept it as the taking back of 350 MW from KESC against the incentives of billion of rupees carries no legal weight. He also declared the 2009 agreement with KESC as unlawful.

Haroon Rashid, Member Balochistan, said the regulator is not bound to look after the rights of power consumers of Sindh and Balohictan only as it had to take care of the consumers of the whole country and it is high time for KESC to stand up on its own feet by abandoning the reliance on 650 MW from NTDC system. He asked KESC to generate the electricity as per the capacity it possesses. Nepra Acting Chairman Habibullah Khilji asked the KESC management to make the idle power plants operational and generate the electricity as per the capacity it has.

However, a KESC official warned if it happens, then KESC will be closed in two months triggering a law and order situation in Karachi. He said if the power plants are operated, then the power tariff will increase by Rs 3 per unit. However, the KESC is investing a lot to generate electricity through coal and biogas techniques.

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