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ISLAMABAD: The federal government is said to have decided to revise electricity tariff mechanism for Azad Jammu & Kashmir (AJ&K) as Power Division has opposed supply of electricity to it as a bulk consumer, well informed sources in Finance Division told Business Recorder.

The decision was taken at a meeting in Finance Division presided over by Special Assistant to Prime Minister on Finance and Revenue Tariq Bajwa.

According to sources, Additional Sectary, Power Division briefed the meeting on both legacy and current issues pertaining to tariff, infrastructure, subsidies and governance/ administrative matters pertaining to electricity supply and consumption for AJ&K.

Chief Secretary and Secretary Energy AJ&K briefed the meeting on fiscal challenges, including outstanding settlement with Water and Power Development Authority (WAPDA) on Net Hydel Profit (NHP)/ Water Use Charges (WUC).

Secretary Power Division, Rashid Mehmood Langrial recommended a separate tariff category for consumers of AJ&K, suggesting that Net Hydel Profit needs to be recovered through tariff at a rate which is being charged in Pakistan and that AJ&K cannot be charged in the bulk consumer category.

SAPM on Finance noted that the current tariff regime in AJ&K is not efficient and creates cash flow issues for both AJ&K and the federal government.

After discussion with stakeholders following decisions were taken: (i) Power Division to submit a request to FBR for treating electricity supply to AJ&K by the ex-WAPDA Discos as zero rated; (ii) Water Usage Charges be paid to GoAJ&K on priority; WAPDA to settle the matter of Water Use Charges for Mangla Hydropower project within 15 days. WAPDA shall contact Secretary Power Division in case of any difficulty in the matter; (iii) Power Division to initiate process for revision of tariff mechanism through introduction of a separate category for AJ&K on bulk consumption or Discos’ rates.

The process shall be completed within two months; (iv) Power Division and GoAJ&K to pursue the matter of establishment of a Disco in AJK, as per ECC’s decision of March 20, 2019;(v) The tripartite agreement signed among WAPDA, M/o Water Resource and GoAJ&K shall be amended to include Neelum Jhelum Hydropower project as decided by ECC on March 20, 2019.

The action may be completed within 15 days; (vi) Power Division and GoAJ&K to workout actual consumption of different categories of domestic consumers, as well as, the subsidy amount on actual basis for consumers of GoAJ&K within l5 days; (vii) GoAJ&K shall file tariff petition for the power projects in AJK such as Jagran Hydropower project.

Power Division to assist the GoAJ&K in this regard; and (viii) GoAJ&K to improve bill collection and develop a quarter-wise annual plan accordingly. Power Division will assist GoAJ&K in firming up the plan within 15 days.

Copyright Business Recorder, 2023

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