MUSHTAQ GHUMMAN

ISLAMABAD: While taking serious notice of additional 10 hour loadshedding in Karachi during the prevailing hot weather, National Electric Power Regulatory Authority (Nepra) has constituted a high level committee to probe the matter.

The Cabinet Committee on Privatisation (CCoP) recently approved issuance of National Security Certificate (NSC) to K-Electric subject to clearance from the federal cabinet, aimed at facilitating smooth sailing of 66.7 per cent shares of M/s Abraaj to M/s Shanghai Electric Power Company(SEP).

However, as Sui Southern Gas Company Limited (SSGCL) became aware that K-Electric’s summary is being presented before the CCoP, gas supply was curtailed under the pretext of non-payment of overdue amount of Rs 80 billion, after which the generation of the power utility declined considerably. The dues of Central Power Purchasing Agency Guaranteed (CPPA-G) are around Rs 24 billion on account of energy supply but K-E claims the amount is just Rs 2 billion.

According to KE, its power generation has declined by hundreds of megawatt of electricity due to reduction in supply of gas from SSGCL. K-E has four gas-based power plants that require 180mmcfd to generate 1104 MW electricity.

The CCoP, has, however, decided that M/s Shanghai Electric Power Company will step into the shoes of KES Power Limited, and, hence, will give an undertaking that all existing financial liabilities of K-E will be taken over by SEP. And SEP will also be responsible for pursuing all existing cases of K-Electric and abide by all legal, national and international requirements as per law.

Both the SSGC and K-E were engaged in negotiations to settle their dispute on receivables/payables, but talks did not proceed after the K-E management sought third party validation of SSGC claims.

K-E has claimed that it has principally agreed to submit security deposit to SSGC and hopes that the required level of gas supply will be restored shortly.

Nepra’s team will comprise of Husnain Zaigham, Senior Advisor (technical), Ch Masood Akhtar, DG/ Consultant (M&E), Hafiz Irfan Ahmed, senior AD (standards), Husnain Gohar, AD (technical) and Junaid Ahmed, AD (standards). Nepra team is scheduled to visit K-Electric from April 11-13, 2018.

An official statement, issued, in view of the extended load shedding in Karachi, states that Nepra has directed K-Electric to submit a detailed report on the issue.

The regulator has also rejected clarifications rendered by K-Electric, saying that justifications given by the power utility were unsatisfactory; therefore, Nepra Authority has constituted a committee to visit K-Electric and investigate the issue.

The sources said Nepra and K-E management have been engaged in a tug of war since long as the power utility challenges almost all the orders of Nepra in Sindh High Court (SHC), many of which are still pending.

The KE’s review tariff petition, submitted through the Power Division represented by the federal government is under Nepra’s consideration for the last couple of months.