NEPRA urges govt to take early decision on the fate of inefficient GENCOs

The National Electric Power Regulatory Authority (NEPRA) has urged the Federal Government to take an early decision on the fate of inefficient GENCOs, in order to reduce the cost of the expensive energy mix.

The Regulator in its latest report The State of Industry 2019 considers that inefficient power plants are needed to be retired on a top priority. NEPRA said that in order to reduce the impact of idle capacity on the overall tariff, Federal Government is recommended to carry out a thorough analysis of any requirement for the import of additional power by K-Electric from NTDC system.

NEPRA considers that it will be in the interest of the overall system, as it will help improve the utilization of power plants, reduce excess capacity itself and provide continuity of power supply to K-Electric consumers in the short to medium term.

It also called for the pursuit of sales growth policies for bringing more consumers to the DISCOs’ network and for retaining the existing consumers, as there is a need to ensure affordable and reliable supply of electricity.

Load-shedding policies must be targeted to the areas with least recovery for short term. Separation of feeders may be considered to isolate paying and non-paying areas. Regressive policies to impose load shedding on larger areas would result in higher tariffs for the rest of the paying consumers.

The report recommended that NTDC must continue its work on improving the quality of its network so that constraints are removed expeditiously. Similarly, the overloading of its transformers should be addressed so that no further hotspots are introduced. Its planning and monitoring functions are expected to be swift to timely notify about such conditions.

The Regulator said that supports the efforts of the Federal Government for targeting the high loss 11 kV feeders for bringing down T&D losses in DISCOs and the approach needs to be extended to all DISCOs. Automatic Metering at different voltage level to track and account for electricity flow should also be initiated in all DISCOs as early as possible.

NEPRA said that the existing setup, with PEPCO assuming central control, is not capable of delivering the necessary improvement in the system and controlling accumulation of Circular Debt. For arresting Circular Debt, the accounting measures only, would not be enough and structural changes are required to be made. In this respect besides allowing due independence as foreseen under the 1992 power sector reform plan to GENCOs and DISCOs, total privatization or public-private model may be explored by the Federal Government.

It also said CPPA-G is required to take into view ground realities, preparedness and capacity levels of the stakeholders for development of market model for the power sector. The model is recommended to be simple and a tailor-made solution while capitalizing on the vital experiences gained during the implementation of such models in other parts of the world.