PESHAWAR: The Khyber Pakhtunkhwa government’s plan to auction 155 megawatts of electricity to industrial units under the wheeling regime has hit a roadblock as two power distribution companies have got a stay order from the court of law against the Nepra’s decision on wheeling charges.

Wheeling is the export of power from generation source to another entity through transmission system of distribution companies, while the fee paid for the use of transmission system is called wheeling charges.

In power wheeling, generation companies use the National Transmission and Dispatch Company’s (NDTC’s) transmission system for high voltage electricity and that of distribution companies for low-voltage power supply.

The Pakhtunkhwa Energy Development Organisation (Pedo) has been selling electricity generated by the 18MW Pehur hydropower unit in Swabi district to five bulk power consumers (BPCs) from the province since last June under the wheeling regime using the Peshawar Electric Supply Company’s (Pesco) distribution system.

Two Discos get stay order against Nepra’s wheeling charges decision

Under the agreement, the Pedo has been providing electricity to the AJ Textile Mills Limited, Cherat Cement, Cherat Packaging, Gadoon Textile Mills and Premier Chip Board Industries at cheaper rates.

The Nepra had granted a wheeling licence to the Pedo in April last year.

Earlier this month, the Islamabad High Court had granted a stay order to the Hyderabad Electric Supply Company (Hesco) and Multan Electric Supply Company (Mepco) against Nepra’s Jan 11, 2021, wheeling cost determination order.

Adviser to the chief minister for energy and power Himayatullah Khan told Dawn that following the stay order, Phase II of the province’s planned auction and wheeling of 155MW electricity was unlikely to move forward.

He said the delay was likely to affect the province ‘drastically’ as it would hamper the energy and power department’s entire policy of providing cheap power to the local industries.

Mr Himayatullah said the stay order would also disrupt the provincial government’s attempts to offset the province’s locational disadvantage by providing cheap electricity to the local industrial units.

“Industrial revival, economic growth, employment and revenue generation for the province will be severely compromised due to a delay in wheeling regime,” he said.

The adviser said KP was the first province to auction its electricity to the local industries at cheaper prices.

“Under the province’s wheeling regime, the local industries are getting a unit of electricity at the rate of Rs9 instead of Rs18,” he said, adding that the distribution company is also getting Rs1.5 for the use of its transmission system.

Mr Himayatullah said the wheeling regime was initiated after the approval of Prime Minister Imran Khan.

He, however, said in the second phase, the province had planned to auction 155 megawatts of electricity generated by at least five Pedo hydropower projects in different parts of the province under the wheeling regime.

The adviser said last Dec, the government had floated bids for the companies interested in purchasing electricity from Malakand–III, Daral Khawar, Ranolia, Jabori and Machai hydropower projects.

He said Malakand-III had the generation capacity of 81MW, Daral Khawar in Behrain area of Swat 36MW, Ranolia in Kohistan 17MW, Jabori Mansehra 10MW and Machai Mardan over 2MW.

Mr Himayatullah said the province had received expression of interests from 79 industrial concerns from across the province.

He said currently, the province was in the bid pre-qualification process.

“This delay is going to hit us drastically as we are generating cheap electricity but cannot provide it to our industries at the lower costs,” he said.

He said on one hand, the province was providing its cheap electricity from Tarbela to the national grid but on the other, it couldn’t do the same for its own industries.

A source in Pedo said the Pesco was not receiving wheeling charges for the transmission of Pehru hydropower to BPCs and apparently, it was in the hope of getting a higher rate.

Published in Dawn, February 23rd, 2021