Date: WB ota JAMAAT-E-ISLAMI KARACHI 503, Quasdeon Colony, Oppose ania Coleg Karacty Ph 42 24 WONG A, Far ss #1 4D 29-04-2023 prot 3269/2023 Mr. Syed Safeer Hussain The Registrar, National Electrical Power Regulatory Authority (NEPRA), NEPRA Tower, Ataturk Avenue (East), Sector G-5/1, Islamabad. SUBJECT: Intervention request regarding the proceedings of K-Electric’s tariff pet for Generation plants for the period commencing from July 01,2023 till remai licensed useful lives of the respective plants / units ion Dear Sir, Accepting the request and re-issuing licenses for K-Electric's outdated and obsolete five power generation plants, namely BOPS-I Units 1, 2, 5, and 6, BQPS-II, KCCP, KGTPS, and SGTPS, would be equivalent to depleting the national treasury and putting en unfair burden on the pockets of Karachi's consumers. This action would only benefit <-Electric and result in a further increase in the country's circular debt and inflation Despite paying their bills on time and buying the most expensive electricity, the citizens of Karachi are experiencing the worst AT&C based load-shedding, while K Fleciric is earning billions of rupees annually by generating the most expensive electricity in Pakistan and selling it to the consumers in Karachi Despite being a monopoly with a large consumer base, K-Electric lacks the incentive to generate and distribute power competitively. Even after 18 years of privatisation, < Electric still generates the most expensive electricity in the country, utilizing power plants that have an efficiency of only 30-35%. Such plants have mostly been decommissioned in the public sector (ex-Wapda) Gencos (generation companies), which now have some most efficient plants at 52-63% efficiency,Dato: ea SV Sheen 3 JAMAAT-E-ISLAMI KARACHI Ret In 2022, after 18 years of privatization, K-Electric's own generation units are being compared with the state-owned KESC units from 2005. Year 2005 [2022 __| Increase or Decrease (%) No. of Consumers (Million) 18 (34 39% KE Own Generation (Units) 9304 [8,496 9% Despite 18 years since KESC’s privatization, K-Electric’s electricity generation from its ‘own sources has decreased by 9% compared to the annual units generated by the state- ‘owned KESC in 2005. This shows that even after all this time, K-Electric has not been able to achieve self-sufficiency in electricity production. As a result of K-Electric's monopoly, consumers in Karachi are compelled to purchase expensive electricity solely from K-Electric. According to NEPRA’s annual State of Industry Reports (SIR) for the past 18 years, K- Electric has not been able to meet the electricity demand in Karachi from its own sources. This is due to K-Electric’s failure to make necessary investments in power generation, as it relies heavily on power obtained from CCPA-G/NTDC and IPPs to maximize its profits. It is recommended that only the generation license of BQPS-IIl 900 MW plant be renewed, and its electricity be sold through the CPPA-G basket. The monopoly of K- Electric should be abolished, and it should be unbundled. Distribution licenses should be granted to multiple electricity companies to provide electricity to consumers in Karachi The generation component of K-Electric should be transformed into an independent power producer (IPP) and sell its electricity to the national grid, adhering to relevant policies. This will prevent K-Electric’s inefficiencies from being passed on to its consumers or the national exchequer. To improve distribution efficiency and promote price competitiveness, it is recommended that the K-Electric area be declared a non-exclusive and open region starting in July 2023Date WS - JAMAAT-E-ISLAMI KARACHI {409 Quadeon ohiny Oppde nlme Cslaye Karna Ym 2 8198N19985 4 Far oe 21 st Rot Implementation of CCPA-G / National Grid Market Basket Model in Karachi Power Plant Location | Capacity (mw) 1_| kelectric 805.1 Bin “| 900 2_| Karachi Nuclear Power Plant Unit-2 (K-2) | Karachi 3_| Karachi Nuclear Power Plant Unit-2(K-3)_| Karachi 4 | Lucky Electric Coal Power Plant Bin-Casim Karachi 5 S_| CPHGC Coal Power Plant Hub, Balochistan TOTAL The plants mentioned above, which are located near the service area of K-Electric, are not only less expensive than the plants within KE's system, but they are also underutilized. By optimizing their operations and making better use of the available resources, it is possible to supply electricity to Karachi and meet the current and future demand for electricity at a minimal cost and with minimal transmission losses. As a result, the consumers of Karachi will not only get the cheaper electricity but also reduce the burden on the national exchequer and the circular debt, which is the priority in the current economic situation of the country. Having said that, K Electric owes billions of rupees to the consumers of Karachi, Sui Southern Gas Company Limited (SSGC) and NTDC. There is currently no gas supply agreement (GSA) with SGC and no power purchasing agreement (PPA) with NTDC. K-Electric must pay back more than 42 billion Rupees to the consumers under Claw Back Mechanism (Sharing of a portion of K-Electric’s profit with consumers). Presently SSGC does not have a Gas Supply Agreement (GSA) with K-Electric. despite the absence of a GSA and K-Electric is Rs177b defaulter of SSGC till Septem’: 2022.Even though on numerous occasions by SSGC to invite KE to sign a GSA. KE has always avoided signing it. SSGC is not obligated to supply more than 10 mmefd gas (GSA with KESC-1978) to K-Electric without GSA, Power Purchase Agreement (PPA) of K-Electric with National Transmission and Dispatch ‘Company (NTDC) also expired in 2015. K-Electric is RS652b defaulter of CCPA-G/NTOC K-Electric had stopped paying power purchases from the national grid in 2018-19 as the power purchase agreement expired in 2015. The amount has accumulated to as490bn as of December 2022, according to the power division that estimates turther build-up of Rs172bn during the current fiscal year.& 5 a alBaraka’O PONS 123100 yn a oe. i taaka bot ian Utd Staton ‘zsr008632 ef Cores) hatte Btn velerd Reed PAYPTIONAL ELECTRIC POWER REGULATORY AUTHORITY or Order HiteweHundied Seventy Four Only PAYABLE AT ANY BRANCH OF ABPL IN PAKISTAN Please do below this ine. ™,O0G53emOaLOb2at "0 20K"Date Wa vac 3 JAMAAT-E-ISLAMI SZ KARACHI 1503, uaiieon Cfo. Oppose tania Cota Kav A new condition of the IMF has been imposed for the elimination of the circular debt the International Monitoring Fund imposed a condition of recovery of 662 billion rupees dues from K Electric, The IMF has stipulated that the government should collect the dues from K Electric in the current financial year, the finance ministry and the power division must implement this condition by June 30, 2023 Instead of cancelling the license of K Electric, how is NEPRA going to issue the license again to K Electric without any compliance / due-diligence with no (GSA) agreement with SSGC and no PPA agreement with NTOC and billions rupees of dues ? Available facts and figures in NEPRA State of Industry Reports(SIR) (from 2005 to 2022), K Electric's poor performance during last 18 years itself an argument for K Electric that it should not be granted a license again. As a representative of the citizens of Karachi and taking into account K-Electric’s poor performance over the past 18 years, | urge NEPRA not to grant a license to K-Electric The company has become a source of distress for the citizens of Karachi and a financiz! burden on the national exchequer. Granting K-Electric a license would only exacerbate the situation, going against the interests of the consumers in Karachi and placing an undue burden on the national treasury. Given the current economic situation in Pakistan, it is of utmost importance for NEPRA to prioritize the protection of the national treasury and the interests of consumers. | will bring up additional points during the time of the hea “ef Hafiz Naeem Gr Rehman. Ameer Jamaat-e-Isiami, Karachi 503, Quaideen Colony, Off New MA Jinnah Road, Opposite Islamia College, Karachi. Copy to: |. ‘The Human Rights Cell of the Supreme Court of Pakistan, Constitution venue, Islamabad 2 The Secretary, Power Division, Ministry of Energy, 'A' tock, Pakistan Secretarial, Isanmatost 3. The Auditor General of Pakistan, Constitution Avenue, Islamabad 4 ice, Q' Block, Pakistan Secretariat, Islamabad 5 ectric Power Regulatory Authority (NEPRA, Muaiurk Weoue (East), NEPRA Tower, Sector G-S/ 1, Islamabad. 6... Chairperson, The Competition Commission of Pakistan (COM, Mh Floor South, SE Towers 5-B, Jinnah Avenve, Islamabad, Pakistan 7, Senator Saifullah Abro , Chairman Senate Stoning ( tee on Bower, Islamabad 8 Senator Mushtaq Ahmed, C-401, Parla