ISLAMABAD: Managing Director, Private Power and Infrastructure Board (PPIB) on Thursday faced strong opposition from the industry and few NEPRA officials for seeking approval of $ 15.3 million as fee for three years against existing capacity of 23,836 MW to be recovered from electricity consumers.
This situation was witnessed during a public hearing on a suo moto proceedings initiated by NEPRA on the PPIB fee at the rate of $ 250/MW, to be recovered from the consumers, like other power sector entities i.e. NEPRA, CPPA-G, NTDC and DISCOs.
NEPRA’s case officer, Muhammad Yousaf briefed the Authority a discussion meeting in the matter was held on 15th June 2023 but the matter remained undecided. CPPA-G was directed through a letter of April 8, 2024 to file petition in the matter. CPPA did not file the subject petition and instead sought some clarification of May 29, 2024.
CPPA-G was again directed vide letter dated 26th PPIB faces backlash from industry and NEPRA for seeking fee from consumersJuly 2024 to file petition in the matter. CPPA-G instead vide its letter dated 29th October 2024 provide certain information and requested to approve the withheld amount.
The matter was re-deliberated and the Authority decided to initiate suo moto proceedings in the matter on January 23, 2025. As per list provided by PPIB, financial impact of fee @250/MW for 19,698 MW is $ 4.92 million per annum.
Currently, annual fee charges by NEPRA is Rs. 44,955/MW while PPIB has requested approval of annual fee of Rs. 70,000/MW ($ 250/MW).
PPIB had been recovering the fee from power projects but a two years earlier, NEPRA had stopped recovery of fee, due to which the Organisation is facing financial crunch and was unable to run its affairs smoothly.
The proposed PPIB fee, which will be applicable on installed generation capacity of 19896 MW and transmission line of 4000 MW, if translated into rupees, its impact has been calculated at Paisa 1.1 per unit for one year and in case NEPRA also allows backlog of previous three years, its one-time impact will be $ 15.3 million (Rs 4.2 billion) or Paisa 3.3 per unit to be recovered in QTA.
MD PPIB was of the view that role of PPIB post commercial operations date is as follows ;
(i) resolve issues of re-settlement
(ii) coordinate and facilitate in the arrangement of security for the project
(iii) support IPPs in settlement of disputes with GoP/AJ&K entities
(iv) evaluate technical experience and financial net worth of new sponsors/ shareholders
(v) issue of NOC for changes in shareholding
(vi) PPIB issues various NOC(s) for different players in the project to ensure national security interest
(vii) resolve gas depletion and alternate fuel issues
(viii) resolve issues for availability of fuel/ gas for smooth operations of Complex(s)
(ix) reform its role as the face of the GoP for all disputes raised by IPPs pursuant to the dispute resolution clause of the IA and any arbitration commenced thereafter.
He further stated that since Discos financial health is not satisfactory due to which PPIB extends guarantee power purchase guarantee on behalf of GoP. He further stated that PPIB fulfils in financial needs from the fee or the interest on deposits in the banks. He, however, did not share total amount in the bank, Board members per meeting fee and reason of not giving representation to the consumers who are paying for the expenses of PPIB.
He was of the view that since all electricity generated by the IPPs is supplied to National Grid and finally consumed by the consumers so they are to pay for the PPIB through tariff.
Mirza further stated that PPIB has been inking different pacts with IPPs but now the federal government has done away with the guarantee of Fuel Supply Agreements (FSAs) for new power projects which previously was part of the documentation of Private Power & Infrastructure Board (PPIB).
Responding to a question, he assured the representative of Atlas Solar that the issue of charging fee in Rupees instead of dollars will be tabled before the Board of PPIB.
Chairman NEPRA, Member KPK, Member (Technical) and Member Law raised some technical questions including overstepping in the role of CPPA-G. The representatives of industry rejected the proposal out rightly, saying that since competitive electricity market is being made functional, there is no need of white elephant like PPIB, proposing is dissolution.
“Prime Minister and Power Minister Awais Leghari are trying to reduce tariff, but PPIB is trying to increase it despite the fact that their role is now redundant,” said Rehan Jawed, a representative of KATI.
He was of the view that every inefficiency is being passed on to the consumers, adding that no one wants to install industry in the country due to current power sector dismal performance and heavy financial burden on the businesses.
Rehan Jawed furthers stated that electricity demand will further go down, requesting NEPRA to wake up before water is over the head. He also criticised NEPRA for not passing on Rs 3 per unit benefit to the consumers of KE for the month of November 2024. He said, there is no role of PPIB in the future as generation is not being added, when CTBCM will be launched let the private sector worry about generation.
“The government should launch CTBCM as soon as possible and reduce the number of departments handling power sector, there should be less decision makers which will make decision making easy and quicker, too many departments and the processes are too lengthy and waste time, he maintained.
Jawed was of the view that industry sales are not increasing instead reducing we try to cut costs and reduce the number of departments and try to survive, but this pass to the consumer mind set will eventually destroy the power sector,” he concluded.
