‘Companies need no licence for power generation, distribution’

ISLAMABAD: The federal government has been working on bringing an ‘institutionalised power policy’ and by end February 2018, it will present its draft before the Council of Common Interests (CCI) for approval under which a ‘national electricity plan’ will be devised to bring new players in power generation and distributionbusiness and create a healthy competition to benefit the consumers in form of low affordable power charges and excellent service delivery.
Companies will not need to get licences for power generation and distribution. Federal Minister for Energy (Power Division) Sardar Awais Ahmed Khan Leghari informed The News/Jang in a special interview that the government has a special focus on bringing new players in this sector, especially in alternative energy generation and distribution as to create a healthy completion and give more choices to the consumers.
He said that in next five years, DISCOs must have to stand on their own feet through controlling power theft, improving recoveries and efficiencies, as under the new policy, we will bring transitional changes in the sector resultantly they [Discos] will face a tough competition.
Awais Ahmad Khan Leghari further informed that the Senate shall hopefully pass Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Bill 2017 [NEPRA Act 2017] on December 11 that gives more powers to the regulator including imposition of three-year imprisonment to DISCOs responsible for sending wrong billing to the clients. The National Assembly (NA) had given its approval last month.
Regarding performance of the DISCOs, he said that every year, they are adding up around Rs135 billion to the circular debt and if they did not turned theirselves around, the country’s power system could doom. He further said that these companies have been hiding their inefficiencies through overbillings, after the NEPRA Act amendments, they will be unable to do so and will strive for more recoveries, stopping power theft and improving their efficiencies.
He also informed that by January 2018, the backlog of around 0.8 million meters (half of them are defective meters complaints) in all DISCOs, would be cleared. In this regard, all DISCOs have been given the orders. After that, we will be making it mandatory for these companies to install meters within 15 days to the applicants, which is right now around four to five months. The government has asked them to give importance to the customers and also strengthening the boards of these DISCOs.
The Minister termed the Net Hydel Profit (NHP) as ‘Hydel Tax’ on consumers, as the cost of the hydel generation is Rs2/unit, but is being sold to the Central Power Purchase Agency (CPPA) at around Rs5.25 a unit and then more costly to the consumers by increasing its tariff.
He proposed that the all the provinces should discuss and decide about NHP in the CCI amicably, otherwise it will create much problems. He said that “We are going bring more private players in ‘Wire and Retail Business’ in power sector to promote a healthy competition among the state-run entities and private sector wire services (i.e. distribution of power) and retail (buying and selling of power from generators and then sell). The policy would provide a roadmap for utilities to transform from vertically integrated monopolies to unbundled autonomous entities; it will support private participation in electricity distribution by providing for multiple distribution licensees and non-discriminatory open access for consumers.
Minister further said that we are also going to bring a license-free regime, under which there will be no need of taking license for generation from the government. We are optimistic to get this regime and over the next two years, there will be multiple power sources available to the power consumers at the same time on their electricity meter and they would decide the use of them the service of their own choice.
Minister also said that the government is also encouraging investment in solar and wind power and is going to auction out several projects in this sector. “In Jhimpir wind corridor in Sindh, the government plans to auction out various projects of 1200 MWs.” In Balochistan, on Nushki Wind Corridor we have started a detailed study which has approximate potential of around 50,000 MWs and which is going to be the major energy hub.
Regarding the federal government’s decision of declaring 62pc [5,297 feeders] load shedding free, he said that it will have an impact of 400 to 800 MWs, but will have a very positive impact on social and economic development of the country. Earlier, there were 3.8 pc or 326 feeders which exempt from power outage. These were those feeders having losses of less than 10pc.
Leghari further said that there are around five generation companies having no CEOs, by January end next year, new CEOs would be appointed and will make a future plan of action to make these plants more efficient.
He said that the government is working on construction of dams, including Diamer-Basha, as construction big reservoirs is the need of the hour to shoulder the agriculture sector – the backbone of our economy.
Regarding NEPRA, Awais Khan Leghari said that the ministry and regulators should be separate entities; however there should be good working relations between them and “we have very good working relations with NEPRA”. He said that making of policies is the duty of government and policy makers and its implementation is the responsibility of the regulators.
He said that we will not do agreements with the power generators that were earlier as long as for 30 years, and now it will be done through open bidding process and the sellers and users of power will decide however the government will have check on it.
He further said that there is no power shortage in the country and we have now won over this issue. In December 2013 the power generation was 9279MWs against the demand of 11800MWs and now, it has improved sizably and current generation capacity is 16477 MWs against the demand of 14,000MWs.