PC also recommends as per National Electric Policy, 2021, independent BODs of DISCOs may fully be empowered by Power Division immediately to approve self-financed projects of DISCOs on pattern of SSGCL & SNGPL

Islamabad   -  The Planning Commission has exempted power distribution companies from the requirement of approving their self-financed schemes from CDWP/ECNEC with the condition that independent BODs of DISCOs may fully be empowered to approve self-financed projects of DISCOs and they should be held accountable for their decisions.

The Planning Commission has also recommended that as per National Electric Policy, 2021, independent BODs of DISCOs may fully be empowered by Power Division immediately to approve self-financed projects of DISCOs on the pattern of SSGCL & SNGPL, official source told The Nation. 

The source said that the Central Development Working Party has approved Position Paper for amendments in ECNEC Decision 2004 related to the approval of Self-Financed Development Schemes of Distribution Companies/Entities.

In the position paper submitted to the Planning Commission, the Power Division has submitted the Position Paper along with composition of DWP and its ToRs/SoPs. In the position paper Power Division proposes that re-composition of DWP Members and TORS/SOPs may be approved by the ECNEC and decision of the ECNEC conveyed vide para 2(iii) of the Planning and Development Division’s OM No 21(2-Gen) PIA/PC/2004, Dated 18-12-2004 may be amended as “The quorum for the meeting of Development Working Party (DWP) would be one half of the full membership of the DWP. Participation of any specific member will not be mandatory. The decision in DWP will be taken with a majority. The project proposal having foreign component/foreign exchange component of more than 25 percent of total cost of the project, the case would be referred to the CDWP for consideration after approval of DWP”.

However, the Energy Wing of the Planning Commission expressed several observations to the proposal of the power division. According the Energy Wing, for effective deliberations on the point of view of Planning Commission & Finance Division, there should be Senior Level representation of Planning Commission & Finance Division in BODs of respective DISCOs.

Representation of Planning Commission & Finance Division be retained as mandatory in light of ECNEC decision dated 2004, to oversee any negligence on the part of DISCOs to avoid violation of Planning Commission guidelines.

Inclusion of Senior Level representation from Planning Commission, Finance Division, Power Division, NEPRA, PEC & eminent expert of Power Distribution Sector (not below the rank of BS 21) may be included in the composition of DWP members.

Ex-post facto approval of the previous work is not supported in line with ECNEC decision dated August 8, 2013 and respective BODs of DISCOs may take appropriate disciplinary action as per rules. Uniform framework needs to be defined/adopted by Power Division for processing the self-financed schemes of NTDC & GENCOs. Power Division may incorporate ceiling powers and re-composition of DWP of DISCOs on the pattern of DDWP/CDWP. As per Planning Commission guidelines, detailed feasibility study including load flow studies may be maybe mandatory for all projects having cost more than Rs500 million and its third-party validation. If there is change in scope & cost of the project more than 15 percent, then revised PC-I will be considered by DWP for recommending to their respective BODs. No PC-I will be considered by DWP/BODs without firm availability of source of financing as per balance sheet of DISCOs.

Implementation of STG projects by DISCOs in line with NEPRA approved Distribution Integrated Investment Plan (DIIP) along with financing arrangement, be ensured by Power Division.

The Planning Commission further observed that it is regretted that Power Division neither submitted self-financed schemes of DISCOs for CDWP approval nor finalised the Mechanism for DWP DISCOs for the last three years. It has been decided that an independent BODs of DISCOs may fully be empowered to approve self-financed projects of DISCOs on the pattern of SSGCL & SNGPL, which shall also be held accountable for their decisions. Now the matter will be presented to ECNEC for final approval, the source said.