K-Electric yet to pay Rs350bn to CPPA

The Central Power Purchasing Agency (CPPA) on Tuesday informed the Senate Standing Committee on Energy that it has yet to receive Rs 350 billion from the K-Electric.

The Senate Standing Committee on Energy was held in the Parliament House under the chair Senator Saif Ullah Abro while additional Secretary Power Division, Managing Director National Transmission and Despatch Company, Chairman National Electric Power Regulatory Authority, Chief Executive Officers/representatives of all DISCOs  and other officials were in attendance.     

CEO of K-Electric (KE), Moonis Alvi, while briefing the Senate Committee said that the company is currently getting 1000 MW of electricity from the national grid.

The Senate Committee asked at what rate KE is purchasing electricity from the national grid. In response to this the CPPA officials said that the basket rate of electricity is determined for all DISCOs and KE is paying the same price.

The CEO of KE said that the Power Purchase Agreement (PPA) with the company had expired in 2015 and since then no new PPA has been signed.

While briefing about power purchase agreement status between K-Electric and CPPA, Moonis Alvi remarked that a draft Interconnection Agreement for supply of up to 2,050 MW to KE from National Grid was initiated on November 10, 2021 pending approval at CCoE.

In June 2022, a Taskforce had also been constituted by the Prime Minister for the resolution of KE issues, which also includes execution of forward-looking contracts. Multiple meetings have been held and agreements will be executed post relevant approvals.

Commenting on the delay in the finalisation of the agreement, Senator Fida Muhammad questioned CEO K-Electric that why the agreement could not be finalised since 2015 and who is responsible for the delay. 

Adding to this Senator Saifullah Abro remarked that the finalisation of the agreement should not be the headache of K-Electric and the power division should ensure resolution of the matter.

The committee further asked for the details KE receivable and payables towards the Federal government.

Sharing an update regarding the receivable and payable position of the company, CEO K-Electric apprised the members of the committee that K-Electric’s total payable towards government stood at Rs 407.7 billion while total receivables from different federal and provincial government entities stood at Rs 483.6 billion and has a net receivable of Rs 76.7 billion.

Officials of the Power Division informed that there is a stay order of the high court in this regard. Secretary Power Division said that matters regarding power purchase agreement with KE will be streamlined to great extent within the next one or two meetings. He expressed hope that the agreement with K-Electric will be finalised soon.

The committee expressed its displeasure over the continuous non-participation of Federal Minister Power Engineer Khurram Dastgir and Secretary Power Division in the committee meetings.

Regarding the recent increase in electricity tariff, the Additional Secretary Power Division said that there is no increase in electricity tariff. 

Explaining that the recoveries were deferred, and now it will be collected. The recoveries were delayed due to the recent floods in the country, the secretary added.

The Secretary acknowledged that there will be an increase in the electricity bills, however, it will be in the context of recovery. The Secretary however ruled out any increase in the base tariff of the electricity.

The standing committee asked for details regarding the increase in electricity prices. When asked about the details, officials of the Power Division were unaware of the hike in electricity prices in the country.

The Power Division officials said that the Ministry of Finance is negotiating with the IMF and they haven’t shared the details regarding the electricity tariff yet with the Power Division. 

On the matter of power breakdown on January 23, the official of the NTDC told the committee that human error was involved in the power breakdown. The committee suggested building four or five more centres in the North and South to avoid blackouts in the country.

The main reason behind the blackout was demand supply gap, the official informed. At the time of breakdown the load on the south was 65%, there was a load of 1700 MW on three lines from Gaddu – the system tripped in seconds due to frequency isolation, the official added.

It was further informed that in winter the difference between load and demand in the main transmission lines creates disturbance. The Standing Committee suggested that instead of North and South centres, the system should be further divided. 

The committee recommended building four or five power centres to protect the power system from tripping in future. This initiative will save the entire country from going into darkness, the committee maintained.

Senator Saifullah Abro asked for the update on power supply situation to Balochistan Agricultural Tubewells on which CEO K-Electric informed the session that there are currently 1,434 tubewell connections in the Balochistan region as of 2022, while the billing throughout the year amounted to 1.04 billion, KE was able to recover 141 million or just 14%.