2 days ago
- Business
- Business Recorder
Sindh objects to Centre's wheeling capacity decision
ISLAMABAD: The Sindh government has raised objections over the federal government's decision to allocate 800 MW capacity for wheeling purposes, arguing that such determinations should rest with the regulator — National Electric Power Regulatory Authority (Nepra), well-informed sources told Business Recorder.
In a letter to the Power Division, Sindh's Energy Secretary Mushtaq Ahmed Soomro, conveyed the province's position on the proposed amendments to the Eligibility Criteria (Electric Power Supplier Licences) Rules, 2023. He stated that the province accepts most of the amendments, except for Rule 5(2)(b), where additional provisions should be incorporated.
According to Sindh's proposal, open access charges should be recovered under the following framework: (i) Grid charges —including transmission and distribution system use charges, market and system operator fees, cross-subsidy charges, metering service charges, etc — shall be borne by consumers opting for open access until the currency of the NE-Plan or as later amended by the federal government ; and (ii) the federal government, in meaningful consultation with provincial governments, shall issue frameworks or policy guidelines for recovering stranded costs arising from market liberalization and open access. These frameworks should reflect market realities, provide incentives to facilitate wheeling, ensure transparency and competition, protect consumer interests, and advance broader economic and social policy objectives.
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Sindh further argued that in cases where bilateral trading occurs entirely within the province, the provincial government should be responsible for providing the relevant framework or policy guidelines for open access charges. The province also emphasized that determining the quantum of capacity allocation is a regulatory function and should therefore be left solely to Nepra.
Additionally, Sindh proposed that where no policy framework exists, stranded costs should be paid by all bulk power consumers of a competitive supplier. These costs would mirror the total generation capacity charges recovered from comparable bulk consumers of suppliers of last resort—whether on a volumetric (kWh) basis or through fixed charges — until revised by the federal government under applicable policy and regulatory procedures. The Sindh Government requested that its recommendations be incorporated into the proposed amendments to Rule 5 before consideration by the Cabinet Committee on Legislative Cases (CCLC).
Separately, the Power Division has already informed the Prime Minister that stranded cost options and proposals for socializing costs, including possible wheeling charges, have been finalized. The Cabinet Committee on Energy (CCoE) approved wheeling charges of Rs 12.55/kWh, which were later endorsed by the federal cabinet.
The framework for wheeling charges on an 800 MW capacity was included in the Indicative Generation Capacity Expansion Plan (IGCEP), approved by the ISMO Board after public consultation. The competitive electricity market is scheduled to be operationalised on September 30, 2025, with Nepra to declare the Commercial Operation Date (CMoD) after issuance of guidelines on optimal wheeling charges.
Copyright Business Recorder, 2025
