ISLAMABAD, Feb 27: Wapda and the KESC on Thursday opposed the sale of electricity by Independent Power Producers to any consumer, saying they alone had the exclusive right to purchase electricity from private producers.
The two utilities were responding to a plea by a US company, Allied Energy System, before the National Electric Power Regulatory Authority. The AES has two plants in Pakistan of 360MW each, AES-Lalpir and AES-Pakgen, that are seeking power generation licences.
The counsel for AES-Lalpir and AES-Pakgen, Khaliq Zaman, pleaded that if IPPs wanted to increase their business they should be allowed to sell their product to any organization other than Wapda and the KESC.
NWFP Nepra member Abdul Rahim said Wapda had been purchasing power at very high rates from the IPPs during initial years and now, under the agreement, IPPs’ tariff would come down and Wapda had the right to continue to make purchases from the IPPs under the implementation accord for which sovereign guarantees had been extended to the IPPs by the government.
He said in case the IPPs wanted to increase their business and enhance the generating capacity and aspired to sell additional power to a third party, then they would have to apply for a separate licence. But, he maintained, they would have to comply with the power purchase agreement under which they were bound to sell electricity to Wapda and the KESC.
Wapda and the KESC told Nepra that they had exclusive rights to purchase electricity from the IPPs and that the IPPs cannot sell power to a third party under power purchase agreements.
They asked the power regulator to ensure that IPPs did not sell power to any other entity while granting the power generation licence to the two IPPs.
Nepra initiated the process of granting the generation licences to the IPPs and has so far held public hearing of Fauji Kabirwala, another IPP owned by the Fauji Foundation.
The Nepra panel hearing the petition of the two AES projects was headed by acting chairman Sardar Mohammad Sharif, who is also Balochistan member. Other members of the panel are: Fazlullah Qureshi (Member Sindh), Mansur Illahi (Member Punjab) and Engineer Abdul Rahim (Member NWFP).
Mr Khaliq of the AES companies and Khalid Masud of the Hub Power Company submitted that their firms were generally complying with rules and regulations, but pointed out that meeting the standards of the Environment Protection Agency was not included in their agreements.
They submitted that meeting the EPA standards would have financial impacts on the companies and if they were forced to comply with the EPA standards then power purchasers should share the extra burden.
They also said that Nepra should not force the IPPs to comply with the EPA standards, rather it should be worked out between the EPA and the companies and the cost incurred on the process should be passed on to Wapda.
Mr Salman of the Pakistan Electric Power Company criticized the AES companies and Hubco for avoiding to comply with the EPA standards, saying the IPPs should participate in alleviating the environmental problems which the IPPs had caused while releasing emissions and effluents from their plants.