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ISLAMABAD: The Senate Standing Committee on Power has sought details of payments made to Kot Addu Power Company (KAPCO) after extension in its Power Purchase Agreement (PPA). These directions were issued at a recent meeting of the Standing Committee presided over by Senator Saifullah Abro.

According to the minutes of the meeting of the committee, Rafique Ahmed Shaikh, vice chairman, Nepra briefed the committee in detail on the status of petition pending before the NEPRA for revision of tariff of GENCO-I.

He informed that it was discussed and decided in the last Committee meeting that CEO, GENCO-I will submit the rehabilitation plan to the NEPRA but the latter has not received it yet.

The chairman Committee observed that committee has taken up the matter of extension of KAPCO and discussed in detail since four months. He asked in what capacity extension to KAPCO was granted, and why have the transactions not been blocked after the expiry of its tenure. He further asked about the details related to the capacity and energy payments made to KAPCO after the extension of contract.

The vice chairman NEPRA informed the Committee that payments were made by the CPPA-G and NEPRA has no role in it.

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A payment of Rs57 billion had been made to KAPCO on the selling units at Rs19.5/unit along with the variable payment; however, no capacity payment was made after the expiry of its tenure. The KAPCO had been made minimal payment with strict tariff rules on the take-and-pay method.

The Committee unanimously decided and directed the NEPRA that payments must be withheld and the details of all payments made to KAPCO be submitted to the committee in extended period.

The chairman Committee asked about correspondence made with CPPA-G and KAPCO at the time of extension. The vice chairman NEPRA informed that a regulator correspondence had been made with the NEPRA from July 2021 till January 2022 on the issue.

The Committee unanimously decided and directed the NEPRA to submit the details of correspondence made with CPPA-G and KAPCO at the time of extension to the Committee till date.

The chairman Committee further stated that the Committee has discussed it several times about the tariff and capacity payments made to the IPPs. He stated that the public sector power plants were easily being put on take and pay and all IPPs are on take or pay. When KAPCO contract was extended whether the NEPRA bounded that their tariff will be in Pak rupees, he asked. He further asked why the NEPRA was not taking any action against the illegitimate contract extension of KAPCO and why not a petition has yet been filed.

The vice chairman NEPRA informed that in the case of KAPCO plant, the NEPRA has decided that if utilized on take and pay or take or pay the capacity payment will not be made to KAPCO. The chairman Committee asked when this decision was taken. The vice chairman NEPRA informed that determination was under process and decision will be taken soon. The chairman Committee observed that when the NEPRA was not taken on board for the extension then how they have decided to put KAPCO on take or pay or take and pay.

He lamented that it is clear that the extension was made with the understanding of the NEPRA and the Power Division and undue favour of the KAPCO.

The Committee members expressed their dissatisfaction over answers by the NEPRA authorities.

The Committee observed that electricity problems in the country cannot be resolved if the Power Division will continue to work in such a delayed and non-serious manner.

The chairman Committee observed that when there was excess electricity in the country then there was no need to taking electricity from IPPs especially from KAPCO when their agreement time had already been completed.

The vice chairman NEPRA informed that KAPCO cannot be put in the Economic Merit Order with Rs19.8 per unit cost. When there will be a need to take the electricity from them, then it will be taken. He further stated that KAPCO Power Plant is on take and pay instead of previously take or pay and the contract was extended without capacity payment.

The vice chairman NEPRA further briefed the Committee in detail about the economical renewable energy projects under construction.

He stated that earlier, it was briefed to the Committee that there are three plants of 150MW with tariff of Rs8 per unit.

Copyright Business Recorder, 2022

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