Power producing province to get priority: govt

ISLAMABAD: None other than the World Bank has severely opposed the government’s proposal to grant first-usage right to the province producing electricity, arguing the policy does not make sense for an integrated power system, reveal official documents available with The News.

“The bank also expressed its opinion that the policy will most likely be economically inefficient since it will preclude the trade of power across the provinces,” the documents state. The government is planning to introduce amendments in the power policy 2002 and to this effect, the committee, headed by Secretary Water and Power Imtiaz Kazi and comprising four secretaries of the provinces, has finalised the amendments, including this critical proposal that based on the location of the power plant, the electricity requirements of the province or local area be given priority. In case the said amendment is approved by the CCI, the electricity crisis will touch a new high in the Punjab, which generates only 30 percent electricity but consumes 60 percent. Surprisingly, however, the Punjab representative in the committee did not oppose the move when the committee finalised this recommendation. While the Punjab maintained a mystifying silence over the proposed amendment, the World Bank has opposed the said amendment.

It is pertinent to mention that under the 18th Amendment, there is a clause in the Constitution under which the gas deficit has become the highest in the Punjab as compared to other provinces. Under the said clause, the province producing gas has the fist right to consume it and the remainder is to be passed on to such federating unit where gas is not abundantly available. This is the main reason that the Punjab is facing a massive gas deficit leading to a massive surge in unemployment as many industrial units have virtually closed down in the wake of non-availability of gas. If the CCI approves the recommended proposal, the Punjab will be exposed to ever more power outages.

Under another proposal that has also been finalised by the committee, the Water Use Charge (WUC) will also be increased to Rs0.425 per unit without annual indexation. The WUC will be reviewed every five years in order to determine whether an increase in the WUC is necessary. In this case, the World Bank has said that the every five years, the WUC review must not be left open ended. Farooq Energy Company has opposed this proposal saying that an increase in WUC is a pass-through item and would lead to higher average hydro tariff.

The committee has also decided that carbon credits earned through clean energy projects from the UN will be utilised for project maintenance and welfare of affected people on an equal basis. The World Bank said that the recommendation should be consistent with the mechanism to share carbon revenues as explained in the government policy for the development of renewable energy 2006.