KESC & the issue of captive power

The establishment of the head-office of the Karachi Electric Supply Corporation (KESC) has transformed the adjoining area from a quiet residential district into a nasty battle-ground of protestors and security personnel. Before long, the streets around these headquarters may be bustling with protestors once again, only this time the irate employees will likely be replaced by boisterous business owners. At the heart of the new battle is the new power supply policy formulated by the KESC. The shock and awe expressed by the citys industrialists belies the fact that this policy should have been seen coming in the aftermath of the KESC-SSGC gas row. KESC has served notices to 250 industrial consumers that have KESC connections but utilize less than 25 percent of their allocated load. The power companys position is that the occupancy of load by these industrial units when they are actually generating their own captive power from natural gas, blocks the companys ability to provide power to other existing and new consumers. Whether KESC can exercise such an option or not, will be determined in time by the judicial system. However, the fact that KESC is having to resort to such actions, speaks volumes for the state of affairs in terms of the availability of power supply to meet mushrooming needs. Natural gas is a scarce resource in Pakistan, and the fact is known to one and all. Flawed or not, there is also a policy; Natural gas allocation & management policy 2005 which highlights the priority of gas supply. It may echo KESCs stance but it is painfully true that the said policy has been blatantly violated. Clause 3.1.6 of this policy states that "gas supply to all consumers in captive power sector will be made after first meeting the requirements of domestic... and power sector (including KESC)". The utility company demands 276 mmcfd gas for its power plants but receives only between 120 and 150 mmcfd, which either results in plants sitting idle or a more expensive fuel mix. Chief Executive Officer - KESC Tabish Gauhar in a recently published interview with Business Recorder lamented that captive power plants in Karachi end up receiving more gas than KESC, generating 25-30 percent lesser power and suggested that "government needs to reconsider its gas allocation policy and cancel all allocations that are made in violation of the gas allocation policy for captive power plants". KESC expects to free nearly 250 MW of load by implementing this decision of disconnecting supply to the industrial units using captive power. Moreover, KESCs combined-cycle power plant of 560 MW would soon be available, for which it needs 130 mmcfd of gas. Should the current policy continue, KESC would not only be deprived of the much needed gas, its plants would also remain idle that would invariably lead to extended load-shedding in Karachi. There is a dire need that the government follows the already laid-down policies in true spirit to ensure uninterrupted and as importantly; affordable power to the citizens as provision of gas would mean at least four-times cheaper power tariffs. Summers are fast approaching, and the sooner a solution is reached, the better it would be.