PESHAWAR: The Khyber Pakhtunkhwa government on Friday declared the National Electric Power Regulatory (Nepra) decision to uncap the province’s net hydel profit (NHP) and increase it from Rs6 billion to Rs18.704 billion per annum as its biggest achievement.

In a report titled ‘the determination of the authority in matter of bulk supply tariff for Wapda hydroelectric supply 2015-16’ and released in the day, the Nepra announced it had uncapped the KP share in NHP before increasing it from Rs6 billion to Rs18.704 billion per annum with 5.5 per cent annual increase.

The decision will take effect from the current fiscal year.

Minister says Nepra increases province’s share in NHP from Rs6bn to Rs18.704bn per year with 5.5pc annual hike

Provincial energy and power minister Mohammad Atif Khan told Dawn that the issue had been unresolved since 1992 when the province began to receive Rs6 billion as the NHP under an interim arrangement and that the successive provincial governments had strived for 25 years to resolve it.

“It is one of the Pakistan Tehreek-i-Insaf-led government’s biggest achievements. The credit goes to KP Chief Minister Pervez Khattak and his team for making this possible,” he said.

The minister said the uncapping of the NHP would give the province’s exchequer Rs13 billion more during the current year.

Shumail Ahmad Butt, legal adviser to the Khyber Pakhtunkhwa government, told Dawn that the Nepra had made the NHP decision on the provincial government’s petition filed in August and heard on September.

He said the chief minister himself had led the province’s team at the Nepra hearing.

“It was a unique occasion for a chief minister to go to a regulator to plead his province’s case,” he said, adding that the chief minister sat through the hearing, which lasted around three hours, and took part in it.

The adviser said the uncapping of the NHP had been there for around 25 years and that it was the current government’s big success to get it reversed.

He said under the Nepra decision, the province would get Rs18.705 billion as the NHP during the current fiscal instead of the previous Rs6 billion.

“The next year, it will reach over Rs20 billion with a five percent increase, and after the addition of more units from new hydroelectric power projects, the amount will go up to Rs24 billion,” he said, adding that it was a big increase in revenue for the province.

In its report, the Nepra said while taking a projected generation of 17,004 gigawatts hours (gWh)on account of hydel power stations situated in KP, the NHP at the rate of Rs1.10 per kWh for fiscal year 2015-2016 had been worked out at Rs18.704 billion against the previously allowed one and therefore, it was including Rs18.704 billion in the revenue requirement of the Water and Power Development Authority (Wapda) as its obligation in respect of the NHP payment to KP as an interim agreement.

According to it, the Council of Common Interest (CCI) had approved Kazi formula for the determination of NHP for revenues from the generation of power from hydro-electric power station in furtherance of Article 161(2) of the Constitution.

It was followed by the presidential order No 3, wherein the Wapda was made responsible for the payment of NHP to the erstwhile NWFP, while the federal government was designated as guarantor.

In the report, the Nepra, however, regretted that the CCI decision about the NHP had been never implemented.

It said in August 1992, on the order of the then federal finance minister and under an interim arrangement, a minimum annual payment of Rs6 billion to the province as the NHP began.

The Nepra said it was allowing the payment to the NHP to KP as an interim arrangement at an enhanced rate of Rs1.10 per kWh.

It, however, expressed concern saying such interim arrangements cannot be allowed to continue in perpetuity.

“It has been more than 11 years that the authority is allowing an interim payment to the petitioner (KP) by the Wapda as the NHP,” it said, adding that there was a need for arriving at a permanent arrangement for the purpose.

Published in Dawn, November 14th, 2015

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