ISLAMABAD, Nov 4: The government is expected to ask around 52 small power producers (SPPs) to supply their surplus power to the Wapda directly or through intermediaries instead of its sale to industrial consumers.

A high-level inter-ministerial meeting has been convened here on Monday to find out a solution to the three-year-old controversy between SPPs and Wapda, official sources told Dawn.

If unresolved amicably, either 52 industrial units would be deprived of their heavy investments in the power generation or Wapda would continue losing sale of its 500MW generation capacity to its prime industrial consumers at a time it has around 2000MW of surplus power.

Two public hearings arranged by the National Electric Power Regulatory Authority (Nepra) over the last one year, protracted negotiations between SPPs and Wapda and interventions from the federal government have so far remained unproductive on the subject.

Commerce and Industries Minister Abdul Razak Dawood will preside over the meeting on Monday. Federal secretaries for finance, ministry of water and power, industries and production, petroleum and natural resources, planning division, Privatisation Commission, Board of Investment, chairmen Nepra and Wapda will attend the meeting.

The SPPs will be represented by the heads of more than 20 private sector textile and sugar companies while heads of at least seven large independent power producers (IPPs), already selling power to Wapda and KESC, would also attend.

The federal government has stepped in to mediate between the SPPs and Wapda when Nepra has just started the process of granting licenses to corporate companies of Wapda and SPPs.

Power sector experts indicate the government would be asking the SPPs to sell their surplus power to Wapda directly or to the larger IPPs so that it could be linked through a uniform transmission system to Wapda line for onward distribution to consumers.

As things stand now, SPPs with a total generation capacity of around 500MW, are running their industrial units through self-generation besides providing uninterrupted electricity to adjoining industrial units.

The Wapda believes that SPPs’ power sale to adjoining industrial units was illegal as it deprived Wapda of prime industrial consumers who were paying at the rate of Rs6 to 7 per unit while Wapda has to provide subsidy to over a million lifeline consumers by selling electricity at the rate of Rs1.40 per unit besides other domestic consumer at the lower rate of an average Rs3.57 per unit.

The Wapda has been pleading that even playing field should be provided to it even if the SPPs are allowed to sell their surplus power and SPPs should also share the subsidies and the mix of power consumers.

The Nepra had asked both the Wapda and SPPs to resolve their issues amicably after holding two rounds of open hearing but they failed. Now it had been decided by the Nepra that all the SPPs meeting the technical and legal criteria be given licences without further delay.

Around 52 industrial units were allowed under 1994 power policy to go for self-generation because of electricity shortfall in the Wapda system and repeated breakdowns and fluctuations. As they had some surplus power as well, the government also encouraged them to sell electricity to adjoining factories.

The situation changed when Wapda faced a power surplus following development of 21 IPPs, including Hubco and Kapco, and the Wapda wanted the industrial consumers to return to its exclusive business domain.

Meanwhile, the provincial governments cancelled no objection certificates (NOCs) to these SPPs and asked them to get licences from the regulator under the Nepra Act, 1997. Since then, the controversy remained unresolved and the SPPs continued electricity sale to industrial units.

The Nepra is now keeping consumers of SPPs out of the exclusive territory of Wapda companies while issuing licences to distribution companies.