The Ministry of Water and Power has complained to the prime minister Mian Nawaz Sharif that the National Electric Power Regulatory Authority (Nepra) was favouring the private power producers in earning billions of rupees, while ignoring public sector energy projects.
In a meeting chaired by the Prime Minister Nawaz Sharif on February 22, Secretary Younus Dagha said the regulator was delaying public sector projects, requesting the premier to make amendments in the Nepra Act to clearly lay down its role and responsibility.
The meeting was also attended by energy ministers.
He suggested that the federal government should formulate a national electric policy in consultation with provincial governments and make strategic plans to empower the federal government to issue policy guidelines to Nepra for handling urgent issues being faced by the government.
While justifying his proposal, he quoted the legal and policy framework in vogue in Bangladesh and India which legally empowers the government to issue binding directions to the regulators.
Officials familiar with the development said Dagha brought several issues relating to Nepra in the notice of the prime minister and federal ministers.
He said the regulator had given benefits to private sector power producers and facilitated them to earn billions of rupees. He quoted an example of the prime minister’s directive where Nepra did not give full relief to the industrial sector in reducing electricity rates.
He said the regulator allowed a relief of only Rs2.40 per unit to the industrial sector despite the directives of a Rs3-per-unit decrease.
Dagha further said Nepra’s decisions while determining tariffs for the public sector energy projects were also discriminatory. He also complained to the prime minister that Nepra had also disallowed lower tariff to LNG power plants.
He pointed out the limitations of the current legal framework – Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 governing Nepra. He informed the prime minister that the Act was vague as far as relations of the federal government with the regulator were concerned.
He complained that the remit of Nepra was restricted to tariff determination and issuing of licences. However, the excessive focus of Nepra on tariff determination and licencing was hampering market reforms aimed at introducing a more open and competitive power market.
Moreover, he said, this attitude of the regulator was the major cause of delay in completion of power projects initiated by the government.
The prime minister directed the ministry to bring back a comprehensive proposal for amendments in the Nepra Act.
