Government plans to recover power dues paid by provinces from NFC Award

The government has planned to recover from the National Finance Commission (NFC) Award the outstanding dues owed by the provinces or their departments to the power sector.

Government plans to recover power dues paid by provinces from NFC AwardThe full cost of service that also includes full general cost will also be passed on to consumers.

Present  government will also reduce reliance on imported fuel for electric power generation and will move towards optimal utilization of local resources such as coal, water, renewable sources, local gas and nuclear.

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This intention of the Power Division has been included in the draft of National Electricity Power Policy 2020 which clearly says that the agreed amount owed by provinces and their departments to the power sector will be automatically adjusted from the NFC Award and departmental budgets.

The government will, with the mutual consultation of provincial governments, prepare a National Electricity Plan. The National Electricity Plan will be a five-year plan with at least 15 years’ perspective.

This National Electricity Policy 2020 will prevail over the Power Generation Policy 2015 to the extent of any conflict or inconsistency. The remaining policy directives of the Power Generation Policy 2015 will continue to remain in field for a period of one year, or till the same are superseded by the National Electricity Plan.

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More importantly Nepra under National Electricity Power Policy 2020 will be allowed to impose additional dues to ensure liquidity of the electricity sector and to facilitate prudent projects of the government.

The regulator will also impose additional dues which shall be deemed to be costs incurred by the distribution companies and electric power suppliers. Such additional charge may take into account the sustainability, liquidity and commercial viability of the sector, affordability for the consumers and the policy of uniform tariff.

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The draft also spells out that the distributed generation is a growing and recognised phenomenon in electricity markets worldwide. The regulator will devise appropriate guidelines for registration of distributed generation with distribution companies. Such registration shall enable incorporation of distributed generation in integrated planning and demand projections by the concerned entities.

Mentioning the generation of electricity, the draft says that sustainable development of the power sector requires that despite varying seasonal energy requirements, sufficient generation capacity be made available to cater for the peak demand of the country.

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