ISLAMABAD, Feb 10: The National Electric Power Regulatory Authority (Nepra) has asked the government to formulate a long-term power sector master plan before seeking foreign or local investment to avoid higher power tariffs or repetition of 1994-like crisis.
The chairman Nepra, Lt-Gen (Retd) Saeed-uz-Zafar told Dawn that Nepra was concerned about power shortage, which was emerging once again, and there had been no planning in the last 10 years to tackle this shortage.
He said the planning in the power sector has been neglected in the last 10 years and capacity expansion is taking place in a haphazard manner. "Our concern is that we may not repeat the mistakes of the 1990s when the country had to enter into costly agreements with foreign firms owing to emergency situations, and poor consumers had to pay the higher price," he said.
Mr Zafar said Nepra had recommended to the government that Planning Commission, Nepra, Ministry of Water and Power, Private Power and Infrastructure Board (PPIB), Wapda and other stakeholders should jointly identify key power sector issues, specify areas and sectors where growth is expected and what could be the cost effective way to expand.
He said in the absence of such a plan, which should be for 10-15 years the proposals were coming from investors for specific projects who advance their own preferences and profit objectives in selecting sites and fuels without taking into account crucial subjects like transmission line facilities or its cost and whether electricity was really needed in that specific area.
Major flaw in the 1994 power policy and reason for higher power tariff in the country was that sponsors were free to select plant location and fuel and the government had to incur huge expenditure on additional transmission facilities.
He said the Nepra had earlier asked the National Transmission and Dispatch Company (NTDC) to provide a "least cost expansion plan (LCEP)" on behalf of the distribution companies and project future needs but its approach was traditional and could not take into account future requirements in the fast emerging new situations.
He said the NTDC's approach on annual power demand was based on historical patterns and projected economic growth.
The government should clearly indicate, for planning purposes, where power demand is expected over the next five, 10 or 15 years and how it wanted to uplift people or sections of society in a specific area.
He said the government was planning to set up a few new industrial cities near Lahore, Karachi, Faisalabad and Sialkot, which was a good thing but it should also indicate how it planned to provide power facilities there. Such things should be catered for in the long-term least cost expansion plan but has not been done by the government so far.
The government, he said, should not wait for emergency-like situations where it has to meet shortages in a panic so that capacity is not increased at any cost but at the best suitable cost.
He said at present Karachi and Punjab were emerging as very deficient parts of the country and need immediate expansion and hence any expansion at this stage should be focussed in these two areas.
The power plants should be developed where shortage and transmission line facilities exist. Otherwise, the higher cost of transmission as a result of plant location selected by the sponsors would translate into higher tariffs for consumers, he said.