KE underscores need for creating ‘working group’ to help conserve energy

ISLAMABAD: Karachi Electric (KE) has proposed formulation of a Working Group with critical stakeholders to develop a forward-looking strategy aimed at exploring ways to promote energy conservation on a national level through participation of consumers.

As the country approaches the start of the summer season and the month of Ramazan, the power sector, including K-Electric is taking measures to ensure sufficient generation capacity is available to match the anticipated growth in power demand.

According to the CEO KE, current global political tensions are driving an increase in fuel price, which has a cascading impact on the world economy and especially the energy chain. Overcoming this national challenge requires critical stakeholders from the power, oil and gas sectors under the leadership of Federal Government to prepare a concerted strategy.

“Through multi-pronged strategy approach, we are confident that the power sector will be poised to overcome future challenges with collaboration, consensus and coordination,” he said in a letter to Minister for Energy, Hammad Azhar.

He has also shared fuel requirement of KE from December 2021 to March-June 2022, according to which the price of 190 MMFCD of SSGC local gas-RLNG mix has shown a 40 per cent increase from Rs 44,025 in December 2021 to Rs 61,576 March-June 2022 (variance of Rs 17, 551). High Speed Diesel (HSD) which was Rs6,585 MMT, rose to Rs 7,548 MMT, showing an increase 15 per cent.

The price of furnace oil, which was Rs 32,632 per ton, will be Rs 52, 125 per ton in March to June 2022, showing an increase of 60 per cent.

According to the letter, quantity is based on expected electricity demand and availability of fuel and gas pressure.

The Cabinet Committee on Energy (CCoE) recently directed Power Division to place pending PPAA, ICA and other agreements with K-Electric for approval in its next meeting.

According to sources, on March 4, 2022, during the CCoE meeting, Minister for Planning, Development and Special Initiatives/ Chairman CCoE, Asad Umar enquired about the status of the Power Purchase Amendment Agreements (PPAA), Interconnection Agreements (ICA) and other allied agreements with K-Electric.

Secretary, Power Division, Syed Asif Hyder Shah informed the forum that it was taking time as the agreements were under review as they entailed massive implications and it was being tried to ensure that maximum possible benefits accrue to the GoP. The CCoE; however, observed that finalization of the agreements was delayed for many months and the same must be placed before the CCoE in its next meeting for consideration/ approval.

Earlier, Finance Minister Shaukat Tarin had directed Power Division to place KE-related three draft agreements, i.e., PPAA, ICA and TDS before the Cabinet Committee on Energy (CCoE) in its forthcoming meeting.

Tarin gave instructions while presiding over an inter-ministerial meeting, convened on the request of Privatisation Commission to sort out pending issues related to some transactions. The three agreements, which will be signed between KE, NTDC and CPPA-G, will pave the way for signing of Arbitration Agreement (AA).

Finance Minister also directed Privatisation Commission (PC) to share KE’s proposed draft Arbitration Agreement (AA) with the Attorney General for Pakistan.

According to Privatisation Commission, the issuance of National Security Certificate (NSC) by Privatisation Commission for transfer of KES’s 66.4 percent shares in KE to Shanghai Electric Power Company Ltd. (SEP) has been intrinsically linked to Karachi Electric’s payables/ receivables with the Government parties. This issue has remained under consideration at various decision-making forums of the Government. It was finally agreed among the stakeholders to resolve this issue through arbitration.

Copyright Business Recorder, 2022