PESHAWAR: Issuing a stay order, the Peshawar High Court has temporarily stopped the Sui Northern Gas Pipelines Limited (SNGPL) from disconnecting gas supply to six major textile mills in Khyber Pakhtunkhwa over their petition against a government’s decision about the suspension of gas supply to them over its use for power generation.

A bench consisting of Justice Ishtiaq Ibrahim and Justice Syed N Attique Shah sought comments within a fortnight from the federal energy and cabinet secretaries on the petition of the Saif Textile Mills and five others against a ‘memorandum reference’ issued by the SNGPL for disconnecting natural gas supply to captive power plants (CPPs).

The petitioners questioned their categorisation as CPPs by the SNGPL saying the Supreme Court had declared them as industrial consumers of the SNGPL and not CPPs, which generated power generation for self-consumption with the intention to sell surplus power to a distribution company or bulk power consumer.

The bench fixed March 31 for the next hearing into the case asking the SNGPL not to disconnect gas supply to the petitioners until then.

Seeks govt reply to plea against captive power plants’ categorisation

The respondents in the petition are the federation of Pakistan through the secretary of the Ministry of Energy (Petroleum and Power Division), Cabinet Committee on Energy (CCE) through the cabinet secretary, and SNGPL through its managing director.

Barrister Ibrahim Khan Afridi appeared for petitioners and requested the court to declare the impugned memorandum reference issued on Jan 28 in violation of law and settled precedent by terming industrial consumers of natural gas as CPPs.

He also sought the court’s order declaring that the impugned memorandum doesn’t apply to the petitioners, which are industrial consumers of natural gas and not CPPs.

The lawyer contended that the petitioners fell in the class of industrial consumers that generated electricity for personal requirements and weren’t CPPs in any way.

He said the core business of his clients was textile and the supply of natural gas to them was for the same industrial use and therefore, his clients couldn’t be called CPPs.

The lawyer said the addition of electricity generation would not alter their core category unless the electricity generated was sold to a third party.

He said the ministry of energy had submitted a proposal to the CCE, which gave approval to it on Jan 21 wherein a moratorium was imposed on the supply of gas to industrial units for self-generation of electricity.

Barrister Ibrahim said following the CCE’s approval, the SNGPL issued the impugned memorandum reference on Jan 28 declaring that gas supply to CPPs needs to be disconnected from Mar 18.

He contended that the National Electricity Power Regulatory Authority (Licensing, Application and Modification Procedure) Regulations, 1999, had clearly defined CPPs industrial undertakings or other business carrying out the activity of power production for self-consumption, which intended to sell power surplus to their requirements to a distribution company or bulk power consumer.

The lawyer said the Supreme Court, in a case titled ‘SNGPL versus Bulleh Shah and others’ had declared that the addition of a captive power for self-consumption to the industrial process didn’t alter the category or the tariff of industrial consumer unless the CPP assumed its own commercial identity and sold electricity to a third party.

Published in Dawn, March 3rd, 2021