ISLAMABAD: The Khyber Pakhtun­khwa government on Thursday demanded a 400 per cent increase in its hydropower profit to Rs5.38 per unit that could proportionately add to the consumer tariff.

KP Chief Minister Pervez Khattak, along with a group of provincial assembly members, asserted before the National Electric Power Regulatory Authority (Nepra) that the regulator was legally bound to allow an increase in the net hydel profit (NHP) to Rs5.38 per unit from existing Rs1.10 per unit without any delay to yield Rs70-80 billion additional revenue to his province.

Interestingly, the regulator was hearing a petition filed by the Water and Power Development Authority (Wapda) that sought an increase of Rs3.61 or 98pc in tariff to finance additional burden for the payment of Rs1.10 per unit NHP to Punjab to match KP’s existing NHP.

“This is a vicious cycle against consumers and a double dip,” said Barrister Asghar Khan, a pro bono lawyer, while speaking for voiceless consumers. He said there could be neither backward calculations for the NHP on the basis of electricity tariff nor retrospective charges for inefficiency, wrongdoing or any such cost to consumers.

The province will generate an additional Rs70-80bn if Nepra raises the rate to Rs5.38 per unit

Wapda’s member finance Anwarul Haq said Wapda’s bulk tariff should be increased from Rs3.69 per unit to Rs7.30 per unit. He said Rs1.10 per unit was being paid to KP following a 2015 agreement between the provincial and federal governments with backdated implementation from the 7th National Finance Commission award instead of the previously capped NHP rate of 30 paisa per unit under the AGN Kazi formula. On the same analogy, Punjab was now being paid the same amount since last year. Therefore, increase in the tariff of Rs3.61 per unit was required.

Mr Khattak said the federal government’s claims of power generation were fruitless because Wapda was not improving its system and the generated power was not reaching consumers. “Are they going to throw surplus generation into the sea or export when they have not improved the system to deliver it to consumers? Wapda is at the peak of incompetence,” he said.

He alleged that decisions of the Council of Common Interests (CCI), led by the prime minister, were repeatedly changed in the minutes, which had become a challenge for him to examine again and again.

He said his province produced about 14pc of electricity, but it was not being given more than 10pc electricity. This 10pc cap should be removed, he said, and added that there would be no need for loadshedding if KP was provided electricity according to its share instead of the current practice of up to 18 hours of power cuts.

He demanded that the entire system of power generation and distribution in his province should be handed over to his government.

He claimed that his government was in the process of completing 700-1,000 small hydropower projects with a total generation of about100 megawatts that would be provided to consumers at Rs2 per unit.

Mr Khattak said he offered to the federal government and Wapda that he would personally ensure 100pc police security and clearance of electricity theft. But Wapda was a corrupt organisation and its staff was directly involved in theft, he said. He said the centre not interested in empowering, improving and strengthening institutions through transparency. He said the government would pump huge money into the power sector three months ahead of elections to overcome power shortfalls, which would re-emerge after elections.

Appearing for consumers, Barrister Khan argued before Nepra that Wapda could not operate under one bulk generation licence because under the Nepra Act, each generation facility has to be separately licensed. It was mandatory for Wapda to provide duly audited accounts or regulatory accounts for public and regulatory scrutiny, he said.

He was of the view that consumers of electricity could not be burdened retrospectively with the arrears of the NHP as it is contrary to the law, constitutional provisions and fundamental rights.

Barrister Khan submitted that the NHP has to be calculated in accordance with the express and mandatory provisions of Article 161 (2) of the Constitution, which provides for the methodology to determine the NHP that cannot be converted into rate asset base by Wapda or the regulator and charged again to consumers. That power has been mandated to the CCI in accordance with prescribed parameters.

He said once the tariff is paid by consumers, they should not be burdened again with the NHP. Otherwise, it will result in unjust enrichment of public-sector entities at the cost of consumers.

He was of the opinion that any financial transfers taking place between the federal government and a provincial government on account of the NHP should not be and cannot be passed on to consumers as the profit is an absolute amount and not based on a kWh basis.

Similarly, he pointed out that the institutions in the power sector were subject to control, directions and supervision of the CCI under Article 154 of the Constitution.

Published in Dawn, June 9th, 2017