PESHAWAR: The Peshawar High Court has stopped the National Energy Efficiency and Conservation Authority (NEECA) from taking action against a leading cement company, which challenged the energy audit of gas-based captive power plants by the authority.
A bench comprising Justice Rooh-ul-Amin Khan and Justice Mohammad Nasir Mahfooz directed the ministry of energy (petroleum and power division) and NEECA to file comments within a fortnight about the petition filed by Cherat Cement Company Limited against the four letters issued by the authority to captive power units, including the petitioner, for conducting their energy efficiency audit.
It also decided to club the petition with the two pending on the issue.
The court fixed June 23 for the next hearing.
Petition challenged energy audit of gas-based captive power plants
The respondents in the petition are the ministry of energy (petroleum and power division) through its secretary, NEECA through its managing director, and Oil and Gas Regulatory Authority (Ogra) through its chairman.
Ibrahim Khan Afridi, lawyer for the petitioner, said the National Energy Efficiency and Conservation Act, 2016, was approved by parliament on June 29, 2016, to establish institutions and provide mechanisms and procedures for effective consumption and efficient use of energy.
He said the law provided for the establishment of the PEEC Board and PEECA having different functions.
The lawyer said the board comprised 23 members, including 16 ex-officio ones.
He said currently, the authority functioned without a full-member board.
The lawyer said on Aug 18, 2020, the PEECA issued a letter saying it has been given the task of the CPPs’ energy audit and therefore, the petitioner and other companies should present themselves for an energy audit on the standards set out by it.
He said the highhandedness of the authority was evident from the letter wherein it threatened to impose RLNG (re-gasified liquefied natural gas) tariff on companies, which didn’t comply with its orders.
The lawyer said the authority, in no way, shaped or determined gas tariff applicable to the petitioner as the Ogra had duly notified the prescribed rates for natural gas being supplied to different categories of consumers on Oct 23, 2020, and the same was applicable to the petitioner.
He said another impugned letter was issued on Sept 23 seeking technical information and that a date and time was demanded for the energy audit of captive power units. The authority also issued two letters on Oct 16 and Mar 17.
The counsel said Section 7 of the Act declared that the authority should recommend national energy efficiency standards to the Board and after approval by the National Standards Body ensure its implementation.
He said the law clearly provided that the recommendations of the national energy and efficiency standards was not the task of the authority alone but it had to be recommended to a fully functioning and existing board and then approved by the National Standards Body.
The lawyer referred to a 2018 Supreme Court judgment, which held the consumers such as the petitioner to be industrial consumers of natural gas rather than captive power consumers.
He said the illegal application of RLNG rates to his client would be devastating for it as it could no longer compete in international and domestic market.
Published in Dawn, June 5th, 2021