ISLAMABAD, Dec 13: The National Electric Power Regulatory Authority (Nepra) on Friday decided to issue a show-cause notice to the Karachi Electric Supply Company (KESC) for not fully utilising its power generation capacity and instead drawing 650MW of cheaper electricity from the national grid.
The decision was taken at a meeting convened to consider the KESC’s request for a 45-paisa per unit increase in its tariff for all consumers under the monthly fuel adjustment formula for October. The meeting, presided over by Nepra’s acting chairman Khwaja Mohammad Naeem, rejected the KESC’s plea for increase in tariff.
Mr Naeem noted that the utility had violated its power procurement agreement with the National Transmission and Despatch Company (NTDC) which required the KESC to fully utilise its own capacity and that of the private power plants in its jurisdiction before seeking electricity from the national grid to meet its additional requirements.
He said that two independent power plants in the KESC’s territory were not brought into full use because of their comparatively higher generation cost and instead 650MW was procured from the NTDC. “This is violation of the (power procurement) agreement (with the NTDC) and we have decided to take action,” he remarked.
“The KESC has been violating rules and regulations by not operating its own power plants at full capacity which implies that the utility is trying to create a national crisis. This situation is not acceptable.”
Mr Naeem said the plant factor of Gul Ahmad Energy remained at 55.81 per cent while that of Tapal plant it peaked at 87.94 per cent. This meant that Gul Ahmad and Tapal were utilised to the extent of 46 per cent, or 12 per cent less than capacity even though the plants were available for use.
He directed the KESC representative to submit within a week a detailed report of the past six months giving figures of how many gigawatt hours of electricity were not produced from its own sources despite availability of in-house (KESC’s own plants plus Karachi-based IPPs) capacity. The report would establish how much loadshedding could have been reduced in the rest of the country in case of full utilisation of the capacity.
He said that on the basis of its own record, the regulator had decided to issue a formal show-cause notice to the KESC for violating the power procurement agreement with NTDC once the KESC’s report was available to complete legal requirements.
The KESC officials who attended the hearing to plead their case for tariff increase did not challenge these observations and said they would provide a report as required by Nepra and then look into the legal questions at an appropriate time and forum.
However, a KESC official privately said that if there been a violation why had the NTDC not taken any action under relevant clauses of the agreement.
This meant the two parties — the NTDC and KESC — were satisfied with the agreement.
The Nepra chief also asked the regulator’s legal team to approach the Sindh High Court and seek an early decision on a stay order against withdrawal of 650MW facility to the KESC because it was affecting consumers elsewhere in the country.
The KESC in its petition for tariff increase had claimed that it had produced 1.4 billion units in October resulting in an additional generation cost of Rs637 million which should be recovered from consumers through a 45-paisa per unit increase in tariff.
