Electricity Pricing Crisis Sparks Outcry in Azad Jammu and Kashmir: Residents Demand Fairness and Accountability

Electricity Pricing Crisis Sparks Outcry in Azad Jammu and Kashmir: Residents Demand Fairness and Accountability

By Engr. Sardar Aftab Khan

Azad Jammu and Kashmir (AJK) - The picturesque region of Azad Jammu and Kashmir, known for its breathtaking landscapes and serene beauty, has lately been overshadowed by an electricity crisis that has sent shockwaves through the lives of its 4.319 million citizens. The exorbitant cost of electricity is disrupting daily life and pushing some of the most vulnerable residents to the brink, with reports of extreme hardship emerging due to the financial burden of high electricity bills. In a region where electricity is essential for daily life, Azad Jammu and Kashmir (AJK) residents are taking to the streets in protest against soaring electricity prices. These ongoing protests in AJK were organised by Awami Action committees, started from Rawalakot in May 2023 and now spreading across AJK. They reveal citizens' concerns about ownership, fair pricing, and transparency in electricity management. Their demands underscore the necessity of a regulatory framework that aligns with their ownership rights.

 A recent briefing paper titled: Expensive Electricity Crisis in Azad Jammu and Kashmir: Understanding the Key Issues and Demands, prepared by Engr. Sardar Aftab Khan, Executive Director of the Kashmir Development Foundation on behalf of the JKGB Dialogue Forum, and key points highlighted by Akram Sohail, former Secretary of Electricity and Engr Afzal Ziai, former Director General of AJK Electricity Department, shed light on the issues and demands surrounding the electricity pricing crisis in AJK.

One critical issue highlighted in the paper is the lack of profit-sharing and local regulatory autonomy. According to international law, regions generating electricity should benefit from the profits. However, it appears that this principle has not been upheld in AJK despite substantial electricity generation.

In 2022, the Government of AJK reported 28 electricity power generation projects in AJK with a total output power of 2,368.22 MW or 23,68,220 kWh. The Water and Power Development Authority (WAPDA) generates 2069.00 MW from two projects. In comparison, the AJK Power Development Organisation (PDO) contributes 64.72 MW, and the Private Power Cell (PPI) and Private Power & Infrastructure Board (PPIB) generate 234.50 MW. Azad Jammu and Kashmir (AJK) has a per capita consumption of 367 kWh, resulting in a surplus production of 23,67,853 kWh per capita. Despite this significant power generation capacity, the question arises: Why is there still an electricity crisis in AJK?

 Key Issues

 1.     Electricity Pricing: AJK boasts substantial electricity generation capacity from its water resources, including prominent projects like Mangala and Neelum Jhelum Reviver basin power projects. However, despite being the source of this power, residents of AJK face significant price hikes in electricity bills due to extortionist Pakistan's uniform electricity tariff formula.  The people and Government of the State of Azad Jammu and Kashmir are not party to any agreements Pakistan has made with private power producers in Pakistan that resulted in the chronic issue of circular debt in Pakistan's power sector. Why should the people of AJK pay for the historical corruption, mismanagement and inefficiencies of Pakistani institutions: WAPDA?

2.     Historical Tariff Changes: The historical trajectory of electricity tariffs in AJK needs to be more consistent. In the past, AJK received electricity at a bulk tariff rate of 1 rupee per unit, which later increased to 2 rupees 59 paise per unit. AJK Electricity Department charged Rs 1.83 per unit (1999-2000) and Rs 13.89 during the year (2021-22). Recent reports have caused alarm, suggesting a 51.1879% proposed increase in electricity prices to a staggering 21 rupees per unit.

3.     Lack of Profit Sharing: International law stipulates that profits generated from natural wealth and resources within a region should be shared with that region after covering project and maintenance costs. For example, Balochistan holds a 15% stake on a fully funded basis and 10% interest on a free carried basis in the Reko Diq project. In the case of AJK, despite the significant electricity generation, this profit-sharing principle still needs to be implemented.

4.     Regulatory Inefficiencies: Allegations of regulatory inefficiencies have surfaced, with claims that electricity tariffs for AJK are determined in Islamabad and Lahore, bypassing the local departments within AJK. Concerns have also arisen regarding regulatory bodies' mismanagement, corruption, and incompetence.

 Demands of AJK Citizens

 1.     Fair Pricing Based on Ownership: AJK citizens are demanding electricity pricing that reflects their ownership of the electricity generation. They assert that affordable electricity is their right as the generators of this electricity and not merely a concession due to their economic circumstances. As such, they advocate for providing 400 megawatts of electricity from the Mangala (Mirpur) Dam at a rate that matches the cost of electricity production in the Mangala Powerhouse and other hydel power stations in AJK.

2.     Ownership Privilege, Not Handout: The people of AJK want to make it clear that they're not asking for handouts or concessions due to poverty. Instead, they assert their rightful ownership and control over their natural wealth and resources, particularly the water used for generating electricity. They're demanding that the Azad Kashmir Government receive the due share of the net profit (known as net hydel profit) generated by all the power plants in Azad Kashmir.

According to Article 161 (2) of Pakistan's Constitution, the net profits earned by the Federal Government or any Federal Government-run entity from major electricity generation at a hydroelectric station should be given to the province where the station is located. Although Azad Jammu and Kashmir isn't officially a province of Pakistan, Pakistan is committed to respecting the wishes of the people of the State, as stated in Article 257. This commitment should be demonstrated and upheld in the present time by recognizing the rights of the people of AJK and Gilgit Baltistan according to the United Nations Declaration on the Right to Development and UN General Assembly Resolution 1803 (XVII)/1962, which affirms people's permanent sovereignty over their natural wealth and resources. Furthermore, considering the United Nations Security Council Resolutions and Mechanism on Kashmir, Pakistan is expected to support Govt. of AJK responsibly and sustainably manage natural wealth and resources to benefit the local population. This includes ensuring that activities like natural resource exploration and power projects are advantageous for the people of AJK and don't cause harm to the environment or exploit AJK's sovereign natural wealth and resources. 

3.     Separation from Pakistan's Tariff Formula: AJK residents are calling for electricity pricing that is distinct from the tariff formula applied in Pakistan. They urge the Government of Azad Kashmir to immediately remove all illegal and unjustified charges, e.g. fuel adjustments, circular duties, and various taxes from electricity bills through notifications. 

4.     Demand for Profit Sharing: There is a strong call for implementing international principles that mandate sharing profits from electricity generation in AJK with its residents.

5.     Water Supply for Irrigation: Water from Mangla Lake should be supplied to Mirpur/Bhimbar for irrigation and drinking purposes, benefiting the region's economy and agriculture.

6.     Revival of Historical Irrigation: Restore the irrigation benefits received by the Kashmir Government from the upper Jhelum canal before Pakistan's establishment, recognizing the economic value of over 500 billion in these benefits.

7.     Local Regulatory Autonomy: AJK's residents demand empowerment from their local regulatory authorities to determine electricity tariffs and manage the sector within AJK. They call upon the Government of Azad Jammu and Kashmir to develop their energy policy and regulatory framework for governing the region's generation, distribution, and electricity pricing.

8.     Transparency and Accountability: Transparency and accountability in electricity pricing and distribution management are non-negotiable for AJK citizens. They demand the removal of any illegal or unjustified charges from electricity bills and the immediate cancellation of any agreements between the Azad Kashmir government, WAPDA, or NEPRA aimed at increasing electricity tariffs.

9.     Consideration of Environmental Aspects and Climate Change: Residents highlight the environmental aspects and climate change, underscoring the sustainability of hydropower and the environmental benefits of water-based generation compared to fossil fuels.

 In conclusion, the ongoing protests in Azad Jammu and Kashmir over electricity pricing bring to the forefront the fundamental concerns of residents regarding ownership, fair pricing, and transparency. Their demands centre on asserting their rights as electricity generators and seeking a regulatory framework that aligns with these ownership privileges. While concerns linger over proposed tariff increases, the core issue revolves around ownership and governance of the electricity sector within AJK.

Note: This article summarizes the contents of a briefing paper and does not take a position on the matter but aims to inform readers about the electricity crisis in Azad Jammu and Kashmir.

About the Author: Engr. Sardar Aftab Khan is an electrical engineer. He is a public policy expert and development professional and can be contacted via E-mail: jkgbdialougeforum@gmail.com  Dated 30/08/2023.