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Business Recorder
6 days ago
- Business
- Business Recorder
NE plan, SEC rules: Nepra concerned at proposed amendments
ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has expressed serious reservations over certain proposed amendments to the National Electricity (NE) Plan 2023–27 and the Supplier Eligibility Criteria (SEC) Rules, 2023, warning that some provisions may hinder the implementation of the Competitive Trading Bilateral Contract Market (CTBCM). According to sources close to the Nepra Registrar, the concerns were raised in response to an Office Memorandum issued by the Ministry of Energy (Power Division) on April 21, 2025. The memorandum sought the Authority's feedback on amendments to both the NE Plan and SEC Rules. Nepra emphasised that the framework for recovery of stranded costs, a critical issue under market liberalisation and open access, should be embedded in the NE Plan itself. Addressing such matters through secondary documents, the Authority noted, runs counter to the intent of Section 14A of the Nepra Act. Nepra hints at negative tariff adjustment of Rs1.80/unit Nepra strongly opposed the interim approach laid out in Strategic Directive 87, which proposes recovering stranded costs equal to total generation capacity charges from bulk power consumers of suppliers of last resort. This method previously obstructed the rollout of the CTBCM, the Authority observed. Instead, it recommended that a comprehensive cost recovery mechanism be integrated directly into the NE Plan to avoid further delays and ensure the regulatory predictability. The Authority also questioned the proposed 800MW cap on open access. It pointed out that the Nepra Act, the NE Policy, and the approved CTBCM design do not specify any such a limit. Furthermore, there is no clarity on the method of allocation—whether it would be uniform, phased annually, or whether it includes bilateral contracts, merchant generation, or captive generation. Nepra advised against a fixed ex-ante cap, warning it could lead to market confusion and delay. As an alternative, it suggested that the NE Plan include a clause allowing the Federal Government, in consultation with Nepra, to impose a temporary cap based on market response. Such a cap should be executed through a transparent, competitive regulatory framework, ensuring flexibility and responsiveness without harming regulated consumers. With respect to the SEC Rules, Nepra reaffirmed its position that Rule 5, which pertains to the determination, recovery, or collection of specific charges, exceeds the legal mandate under Section 23E of the Nepra Act. That section only authorises the Federal Government to set eligibility criteria based on solvency, technical capability, and public service obligations. Nepra previously raised these objections in a letter of May 17, 2023, during an earlier consultation process. It also noted that Rule 5 is currently under litigation in Writ Petition No. 4492/2023 (APTMA v. Federation of Pakistan & Others) in the Islamabad High Court. In light of this, Nepra recommended that Rule 5 be deleted and the SEC Rules brought into full compliance with the Nepra Act to avoid jurisdictional conflict and legal ambiguity. Wrapping up its comments, Nepra urged the Ministry to revisit the proposed amendments to both the NE Plan and the SEC Rules, taking into account the Authority's legal and operational concerns. It stressed that ensuring consistency with the Nepra Act and facilitating a smooth rollout of the CTBCM is critical to achieving market liberalization objectives without regulatory or legal setbacks. Copyright Business Recorder, 2025
Business Recorder
08-07-2025
- Business
- Business Recorder
Recovering PPIB's annual fee: Nepra approves 1.1 paisa per kWh tariff hike
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved a power tariff increase of 1.1 paisa per kilowatt-hour (kWh) by allowing the recovery of the Private Power and Infrastructure Board (PPIB)'s annual fee of $250 per megawatt (MW) from electricity consumers. This adjustment permits the annual PPIB fee to be treated as a pass-through cost, similar to other recoverable charges by the Central Power Purchasing Agency-Guarantee (CPPA-G) and the Nepra itself. The Nepra held a suo motu public hearing on February 13, 2025, to seek input from PPIB and stakeholders. As per Nepra's rules, any fee levied on power generation or capacity is typically passed on to consumers. Power tariff hike: govt reaches 'understanding' with IMF In its determination issued Monday, Nepra acknowledged that PPIB has significant budgetary needs, including plans to develop infrastructure such as a dedicated office building. While these may be valid from an operational perspective, Nepra emphasised that any cost passed on to end-consumers must be carefully justified and balanced against electricity affordability. 'The Authority recognises PPIB's institutional requirements but also must ensure that costs allowed as pass-through items do not place an unjustified burden on consumers,' the determination stated. 'Only demonstrably necessary, efficient and proportionate expenses should be permitted under the Nepra Act.' Nepra noted that while it scrutinises and approves the budgets of other licensees such as the Market and System Operators, it does not currently have the authority to vet PPIB's budgetary requirements. This lack of oversight, the Authority observed, reinforces the need for the PPIB fee to be rationalised and denominated in rupee terms to minimise exchange rate risks and unnecessary financial pressure on consumers. From PPIB's perspective, the annual fee is necessary to ensure institutional financial sustainability and falls within its legal mandate. However, Nepra acknowledged that many Independent Power Producers (IPPs) view this fee as an added financial burden not originally factored into their tariff structures or Power Purchase Agreements (PPAs), especially since the PPIB Fee Rules were introduced in 2018. Nepra noted that the CPPA-G has treated the fee as a pass-through in most cases. However, for projects under the 2015 Power Policy, this treatment depends on the 'change in law' provisions within their contractual frameworks, requiring both Nepra's determination and a government notification. 'In view of the legal framework, historical practice, and the need to maintain regulatory consistency, the Authority has allowed the PPIB annual fee as a pass-through, subject to compliance with the relevant provisions of PPAs/ EPAs and Nepra's tariff regime,' the decision stated. PPIB earlier informed Nepra that while some IPPs have paid the annual fee without objection, others have raised concerns before forums including the Minister for Energy and the secretary Power Division. These IPPs argued that the original $300/MW fee was excessive and requested a downward revision. In response, the PPIB Board reduced the annual fee to $250/MW through the 'PPIB Board (Fees and Charges) (Amendment) Rules 2021,' which were officially notified on June 15, 2022, following Board approval in August 2021. Commenting on the decision of Nepra, Barrister Asghar Khan, a power sector legal expert, stated that the PPIB fee allowed by the Nepra as a pass-through is not permissible under the Nepra Act, Rules and Regulations. 'When PPIB fee is not part of the capital expenditure (CAPEX), operational expenditure (OPEX), Quarterly Tariff Adjustments (QTAs) or Fuel Price Adjustment (FCA), of the IPPs, then how in a slipshod manner, it to be treated as part of the tariff by the Nepra Authority,' he added. According to him, the Nepra Authority does not have the competence and jurisdiction to admit and allow such charges, fees and taxes as part of the tariff when (i) PPIB is not a licensee of the Nepra and (ii) such fees, charges and fees are not levied as part of the generation, transmission and distribution business of the power entities. Needless to mention that such fees and taxes have been allowed in exercise of suo motu powers exercised by the Nepra Authority which powers are not vested in the courts of law let alone the Nepra Authority. He stated that the Nepra Authority does not have the power and competence to convert fees and charges into tariff or terms and conditions of the tariff. The PPIB Fee levied under Section 5 (2) (i) of the PPIB Act 2012 prescribes that it shall receive fees and charges for processing applications and deposit and disburse or utilise the same, if required. Such fees and charges are never meant to be part of the tariff to be charged to the consumers of the electricity. Further, such fees and charges constitute part of the PPIB Fund under Section 14 of the PPIB Act 2012 and are not to be treated as a pass-through in the tariff. He said furthermore, the PPIB fee is not part of the security package agreements or any power policy then how Nepra Authority has allowed such PPIB fee as part of the tariff and an additional burden on the consumers of electricity. The PPIB is a public entity as such entity is defined under the Public Finance Management Act, 2019, and without any views of the Finance Division on the policy, guidelines, rules or regulations framed for the PPIB Fund constituted under the PPIB Act, 2012, Nepra has allowed these charges and fee as part of the tariff which in essence means that monies from the Public Accounts are withdrawn to be collected and disbursed to the PPIB fund which is violation of the constitutional provisions, Nepra Act, 1997, PPIB Act, 2012, and PFMA 2019, he said. He was of the view that the Nepra Authority without any financial analysis has allowed the entire fees levied by the PPIB in a blanket manner. The scope of such fee is unlimited spanning from 1994 Power Policy, 2002 Power Policy, 2015 Power Policy, RE Policy 2006, ARE Policy 2019 and others. 'The Nepra Authority's Order is bad in law as it does not define the scope, quantum, causation; etc., of such fee in relation to the electric power services and is a taxation without the approval of Parliament under Article 77 of the Constitution of Pakistan which clearly directs and mandates that 'No tax shall be levied for the purposes of the Federation except by or by or under the authority of Act of [Majlis-e-Shoora (Parliament)],' he concluded. Copyright Business Recorder, 2025
Express Tribune
25-06-2025
- Business
- Express Tribune
NEPRA issues notice to K-Electric over load-shedding
Prior approval to NEPRA K-electric consumer may seen a huge relief over electricity bills. PHOTO: FILE Listen to article The National Electric Power Regulatory Authority (Nepra) has served a show-cause notice on K-Electric (KE) over failure to comply with its instructions relating to forced load-shedding. The regulator pointed out that KE had been resorting to load-shedding based on aggregate technical and commercial (AT&C) losses, which violates the Nepra Act and the Performance Standards (Distribution) Rules, 2005. According to the authority, distribution companies (DISCOs) are bound to maintain plans and schedules to shed up to 30% of their connected load at any time upon instructions from the National Transmission and Despatch Company (NTDC). This load must be divided into separate, switchable blocks that can be disconnected as directed by NTDC. Copies of these plans must be shared with NTDC. Nepra emphasised that NTDC, where possible, should provide distribution companies with advance warning of impending load-shedding to help maintain system voltage and frequency in line with the Grid Code. NTDC is also responsible for instructing distribution companies about the specific amount of load to be disconnected and the timing, using clear and unambiguous communication based on approved plans. Previously, on January 8, 2025, Nepra issued an explanation to KE under Regulations 4(1) and 4(2) of the Nepra (Fine) Regulations, 2021, citing non-compliance with its directives. The regulator stated that KE had been implementing load-shedding based on AT&C losses, which violates the Nepra Act and the Performance Standards (Distribution) Rules, 2005. In this practice, entire feeders with commercial losses – such as electricity theft and non-payment – are shut down for hours, even when some consumers on those feeders are fully compliant and regularly pay their bills. "Nepra considers this unfair to compliant consumers." In response to this practice, the authority had initiated and concluded legal proceedings, resulting in a Rs50 million penalty on KE. "Nepra continues to stress that load-shedding should only be carried out at the Pole Mounted Transformer (PMT) level and only when absolutely necessary – such as in the case of generation shortages or transmission constraints, and only under instructions from system operators." Meanwhile, KE launched a project in 2021 to install Advanced Metering Infrastructure (AMI) and Automated Meter Reading (AMR) system at the distribution transformer level, costing Rs600 million. The project aimed to identify energy losses due to theft and non-payment and to facilitate commercial benefits. KE also claimed that these meters would enable remote connection and disconnection at the transformer level. The project was completed in December 2021, with a test run conducted through June 2022. Nepra reviewed the project's records, reports and KE submissions and found that while the company has reaped commercial benefits from the AMI/AMR system, it has not utilised the technology to provide relief to consumers by performing targeted load-shedding at the PMT level, despite the capability to do so. Furthermore, during public hearings on monthly fuel cost adjustments (FCA), Karachi residents widely complained about excessive and unfair load-shedding, reinforcing Nepra's concerns. A KE spokesperson regarding Nepra's show-cause notice stated, "KE is currently reviewing the show-cause notice received from Nepra. After a comprehensive review, we will submit our response in line with the timeframe set by the authority."
Business Recorder
24-05-2025
- Business
- Business Recorder
Govt set to appoint new member for Nepra tribunal
ISLAMABAD: The government is set to appoint a new Member (Finance) to the Nepra Appellate Tribunal after the most recent nominee recommended by the Sindh government declined to take up the position, well-informed sources told Business Recorder. The National Electric Power Regulatory Authority (Nepra) Appellate Tribunal, based in Islamabad, was established under Section 12-A of the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Act, 2018 (commonly known as the Nepra Act). The Tribunal has jurisdiction across the entire country. According to the Nepra Act, the Tribunal comprises a Chairman and two Members—one for Finance and one for Electricity. Sections 12-A and 12-B of the Act outline the qualifications, eligibility criteria, and tenure for both Members, specifically, Section 12-A of the Act states that the Member (Finance) must meet the following criteria: Classification of cold storage facilities: Nepra faces legal challenges following decision of appellate forum 'A Member (Finance) shall be a qualified chartered accountant, a qualified cost and management accountant, or a qualified chartered financial analyst...' The Member (Finance) is to be appointed for a term of three years, with terms and conditions as prescribed by the relevant rules. Furthermore, the Act stipulates that no person who has attained the age of 60 years shall be appointed as Member (Finance).' No person shall be appointed as member of the Appellate Tribunal unless he-(i) has at least a masters or professional degree or qualification from an accredited university; (ii) at least fifteen years of professional work experience; (iii) no past record of criminal conviction, other than for minor offences; and 155 (iv) has no past record of any specific activities or conduct that could reasonably call into question his ability to discharge his duties as a member of the Appellate Tribunal with honesty, integrity, reliability, competence and objectivity.' Earlier the nomination by the Government of Sindh was considered and approved by the Cabinet Division. However, the nominated member subsequently refused to join as Member (Finance), Nepra Appellate Tribunal, Islamabad. Government of Sindh has once again been requested to send suitable nominations afresh for appointment of Member (Finance) in the Tribunal as per relevant Act. In light of the above-stated qualification/ selection criteria, a panel of three candidates along with their Bio-Data and Service Record, fulfilling the required criteria is to be sent to the relevant Division for consideration for appointment as Member (Finance) in the said Tribunal having its Headquarters in Islamabad, exercising its jurisdiction in whole of the country. Ministry of Law and Justice has requested Power Division to expedite and send the needful nomination to it, enabling the Ministry to make appointment of Member (Finance), in NEPRA Appellate Tribunal, Islamabad. Copyright Business Recorder, 2025
Express Tribune
14-03-2025
- Business
- Express Tribune
DISCOs request tariff reduction of 30 paisa per unit
Iesco stood on top in the wake of its plausible performance to curb losses, improve recoveries and act in line with the time frame for new connections. PHOTO: FILE Listen to article Electricity consumers are likely to get a tariff relief as power distribution companies (DISCOs) have asked for a reduction of 30 paisa per unit on account of fuel charges adjustment (FCA) for February 2025. To review a petition in this regard, the National Electric Power Regulatory Authority (Nepra) has scheduled public hearing for March 26. The hearing will be held at Nepra Tower that can be accessed online. The downward tariff revision, sought by the Central Power Purchasing Agency Guarantee Limited (CPPA-G) on behalf of DISCOs, indicated a reduction of Rs0.2984 per unit compared to the reference fuel cost of Rs8.5276 per unit, as notified in the tariff. According to data submitted by CPPA-G, a total of 6,945 gigawatt-hours (GWh) of electricity was generated during February, with major contribution coming from hydel sources at 27.12%, followed by nuclear power (26.59%), re-gasified liquefied natural gas-based electricity (14.11%) and local coal-fired power generation (15.02%). Imported coal had a share of just 1.56% in electricity production while renewable sources, including wind and solar, contributed 2.50% and 1.22%, respectively. The net electricity delivered to DISCOs after adjustments and transmission losses came in at 6,666 GWh at an average fuel cost of Rs8.2292 per unit. Nepra has invited all interested and affected parties to submit their objections and concerns, either in writing or orally, during the hearing. Relevant documents including the Nepra Act, regulations and the CPPA-G request are available on the Nepra website for public review.
