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Expensive Electricity Crisis in Azad Jammu and Kashmir- Understanding the Key Issues and Demands

Expensive Electricity Crisis in Azad Jammu and Kashmir- Understanding the Key Issues and Demands

Prepared by Sardar Aftab Khan, Executive Director, Kashmir Development Foundation, on behalf of JKGB Dialogue Forum

This briefing paper aims to provide an overview of the key issues and demands of Azad Jammu and Kashmir (AJK) citizens regarding electricity pricing. It benefits from the insights provided by Akram Sohail, former Secretary of the Electricity Department, AJK. It outlines the primary concerns, demands, and the context of the ongoing protests in AJK.

Key Issues

1.     Electricity Pricing Disparities

 a)    AJK generates substantial electricity from its water resources, including projects like Mangala, Neelum Jhelum, and others.

b)    Despite being the source of this electricity, AJK residents have faced significant disparities in electricity pricing compared to other regions.

2.     Historical Tariff Changes

 a)    In the past, AJK received a bulk tariff of 1 rupee per unit of electricity, which later increased to 2 rupees 59 paise.

b)    Recent reports suggest that there is a proposed increase in electricity prices to 21 rupees per unit, which has caused concern among the population.

3.     Lack of Profit Sharing

 a)    According to international law, profits from resources obtained within a region should be shared with that region after covering project and maintenance costs.

b)    In the case of AJK, it appears that such profit-sharing has not been realized despite the significant electricity generation.

4.     Regulatory Inefficiencies

 a)    There are allegations of regulatory inefficiencies, where despite having local departments in AJK for tariff management, electricity tariffs are determined from Islamabad and Lahore.

b)    Concerns have been raised about regulatory bodies' mismanagement, corruption, and incompetence.

 Demands of AJK Citizens

 1.     Fair Pricing Based on Ownership

 AJK citizens demand that electricity pricing should be based on the right of ownership. They assert that cheap electricity is their right as the generators of this electricity, not merely a concession due to their economic circumstances. Therefore, 400 megawatts of electricity from the Mangala (Mirpur) Dam should be provided to Azad Kashmir at the rate that is being incurred per unit of electricity production in the Mangala Powerhouse.

2.     Ownership Privilege, Not Concession

 The people of AJK emphasize that they are not seeking concessions due to poverty but are asserting their right and sovereignty over their natural wealth and resources as owners of the electricity generation. They demand the net profit (net hydel profit) from all power plants in Azad Kashmir from hydropower to be paid to the Azad Kashmir Government. 

According to Article 161 (2) of the Constitution of Pakistan, ‘the net profits earned by the Federal Government, or any undertaking established or administered by the Federal Government from the bulk generation of power at a hydro-electric station shall be paid to the province in which the hydro-electric station is situated.’ Although Azad Jammu and Kashmir is not a province of Pakistan. However, under the United Nations Security Council Resolutions and Mechanism on Kashmir, Pakistan has specific responsibilities regarding managing natural resources in Azad Jammu and Kashmir (AJK). Pakistan is expected to manage the natural resources in AJK responsibly and sustainably, taking into account the interests and needs of the local population. This would involve ensuring that the exploration of natural resources, e.g. power projects, benefits the people of AJK and does not lead to environmental degradation and exploitation of the sovereign natural wealth and resources of AJK.

3.     Separation from Pakistan's Tariff Formula

AJK residents demand that the electricity pricing in AJK should be separate from the tariff formula applied in Pakistan. Therefore, the Government of Azad Kashmir should immediately remove all illegal and unjustified charges from electricity bills through notification.

 4.     Demand for Profit Sharing

There is a call for the implementation of international principles that require the sharing of profits from electricity generation in AJK with its residents.

 5.     Local Regulatory Autonomy

 The people of AJK call for the empowerment of their local regulatory authorities to determine electricity tariffs and manage the sector within AJK. Therefore, the  Government of Azad Jammu and Kashmir should develop its own energy policy and regulatory framework to govern generating, distributing, and pricing electricity within AJK.

 6.     Transparency and Accountability

 There is a demand for transparency and accountability in the management of electricity pricing and distribution, including removing any illegal or unjustified charges from electricity bills. Therefore, If the Azad Kashmir government has agreed with WAPDA or NEPRA to increase the electricity tariff, it should also be cancelled immediately.

 7.     Consideration of environmental aspects and climate change

 The environmental aspect and climate change are highlighted, with residents emphasizing the sustainability of hydropower and the environmental benefits of water-based generation compared to fossil fuels.

Conclusion

 The ongoing protests in Azad Jammu and Kashmir over electricity pricing highlight the fundamental concerns of the residents regarding ownership, fair pricing, and transparency. The citizens' demands revolve around asserting their rights and sovereignty over their natural wealth and resources as owners of the electricity generation and seeking a regulatory framework that aligns with their ownership privileges. While there are concerns about proposed tariff increases, the primary issue is rooted in ownership and governance of the electricity sector within AJK.

 Note: This briefing paper is intended to provide an overview of the key issues and demands of AJK citizens regarding electricity pricing. It does not take a position but aims to inform stakeholders and decision-makers.

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