The government has decided to conduct an audit of Neelum-Jhelum surcharge collection from power consumers through the Auditor General of Pakistan.

The Water and Power Development Authority (Wapda) was to collect the Neelum-Jhelum surcharge till the start of commercial operation of Neelum-Jhelum hydropower project. The plant became operational in 2018, however, Wapda continued to collect the surcharge.

Now, the Pakistan Tehreek-e-Insaf (PTI) government has decided to conduct an audit of the surcharge collection. It has also decided to abolish the surcharge from next month, which was collected at a rate of Rs0.10 per unit from the consumers to finance the hydropower project.

In a recent meeting of the Economic Coordination Committee (ECC), the Power Division recalled that pursuant to the request for financing the Neelum-Jhelum hydropower project, the ECC, on December 12, 2007, approved the imposition of a surcharge of Rs0.10 per kilowatt-hour (kWh) on electricity requisition from all concerns except for K-Electric and lifeline consumers for eight years from January 2008 to December 2015.

However, pursuant to the extension granted by the ECC in its decision in May 2018, the Neelum-Jhelum surcharge was allowed to be imposed until the commercial operation date (COD) of the whole project.

The Neelum-Jhelum plant delivered 590 gigawatt-hours (GWh) of electricity from unit three on July 4, 2018, 453 GWh from unit four on October 4, 2018, 331 GWh from unit two on August 27, 2018 and 314 GWh from unit one on December 28, 2018.

The Power Division told the meeting that Wapda had communicated that the effective date for tariff application as per the National Electric Power Regulatory Authority’s (Nepra) notification (taken as equivalent of COD) was July 4, 2018.

However, the Ministry of Water Resources neither officially communicated COD of the whole project to the Power Division, nor did it request the ECC to rescind the Neelum-Jhelum surcharge after completion of the project.

From January 2008 to December 2018, power distribution companies collected Rs67.167 billion and transferred Rs62.670 billion to Wapda on account of Neelum-Jhelum surcharge.

The Power Division submitted proposals for consideration of the ECC. It said that the Neelum-Jhelum surcharge already imposed on electricity consumers at Rs0.10/kWh for development of the project may be revoked with immediate effect.

The Neelum-Jhelum surcharge collected by the distribution companies, and transferred to Wapda after December 28, 2018 ie, the date of taking over all units of Neelum-Jhelum project, be audited by the Auditor General of Pakistan.

It further said that the Neelum-Jhelum surcharge collected after Wapda took over the project may be returned to the eligible consumers/adjusted in their forthcoming electricity bills.

The ECC considered the summary titled “Revocation of Neelum-Jhelum Surcharge @ Rs0.10/kWh” and approved the proposal.

Published in The Express Tribune, February 26th, 2021.

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