Discos accused of violating tariff determinations

The National Electric Power Regulatory Authority (Nepra) has accused power Distribution Companies (Discos) of violating tariff determinations with regard to losses and delayed payment mark-up rules to Independent Power Producers (IPPs).
"The Authority has carefully examined Discos'' request and observed that the Central Power Purchasing Agency (CPPA) has not been complying with the decisions of the Authority with respect to cost disallowed in the monthly adjustments ie delayed payment mark-up paid to IPPs and transmission losses beyond 2.5 percent," said Syed Safeer Hussain, Registrar Nepra, in a letter to the federal government.
The Authority considers that CPPA created under Article 8 of the license issued to NTDC is bound to comply with the decisions/directions of the Authority in letter and spirit, he added. In the Authority''s opinion the costs disallowed by way of delayed payment mark-up do not pertain to the monthly fuel price adjustment and these costs cannot be considered as prudent costs therefore cannot be passed on to the end-consumers.
The Authority, however, considers that the matter of delayed payment mark-up to IPPs is a very serious issue and therefore advised CPPA to take it up with the concerned quarters which in the instant case are Ministry of Water and Power and Ministry of Finance.
Nepra has advised that proper Power Purchase Agreements (PPAs) with the Gencos and Power Sale Agreement (PSA) with the Discos must be executed by CPPA/NTDC within two months but no later than March 15, 2011 so as to ensure compliance with the provisions of agreements including charging for delayed payments in accordance with the terms agreed in the PPAs and PSAs. Syed Safeer Hussain further said that the Authority considers that non-compliance of its decision is a serious violation of NEPRA Act, Rules made there under and the licensing terms of National Transmission and Dispatch Company (NTDC). The Authority has directed the CPPA to issue on priority basis revised invoices in accordance with the decisions of the Authority.
"The Authority also cannot accept the CPPA''s request for allowing transmission losses beyond determined/notified transmission losses of 2.5% till it decides to revise/modify its earlier decision with respect to the transmission losses based on the facts put before the regulator by NTDC with documentary evidence," he concluded.