Tariff petition: PPIB for excluding certain projects from Nepra application

ISLAMABAD: The Private Power and Infrastructure Board (PPIB) has proposed that pipeline hydropower projects who filed tariff petition prior to the promulgation of the NEPRA (Electric Power Procurement) Regulations, 2022, and prior to the required date of CTBCM implementation under NEPRA Act, ie, April 30, 2023, should be excluded from the application of the NEPRA (Electric Power Procurement) Regulations, 2022, well-informed sources in the PPIB told Business Recorder.

Managing Director Shah Jahan Mirza, in a letter to the Power Division has made reference to the Power Division’s memorandum of March 21, 2024, along with a copy of the Prime Minister’s Office U.O of March 15, 2024, attached with a copy of Korea South-East Power Co Ltd (KOEN)’s of March 11, 2024, regarding the matter titled, “foreign direct investment $1 billion)- 238 MW Kalam–Asrit hydropower project and 229 MW Asrit-Kedam hydropower project.

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KOEN is a state-owned enterprise of South Korea. KOEN has completed 102 MW Gulpur HPP in AJK/Pakistan under Policy for Power Generation Projects 2002. PEDO, Government of Khyber Pakhtunkhwa, issued LoIs to KOEN under KP Hydropower Power Policy 2016 (containing Tri-partite Letter of Support (TLOs) provision linked with CCI approved GoP Power Generation Policy 2015) to develop Kalam-Asrit and Asrit-Kedam HPPs. Feasibility studies of the Projects have been completed and approved. Certain other important milestones e.g. environmental NOC, forest de-notification, IRSA consent, grid interconnection study of Swat cascade, inclusion of projects in IGCEP 2022-31 and generation licence have been achieved.

With regards to the Korean companies’ tariff issue, the PPIB has apprised that feasibility stage tariff petitions for the projects were filed in June 2022 before NEPRA. Tariff petitions were admitted by NEPRA and a public hearing was held in July 2023. However, tariff determination is still pending because there is ambiguity regarding the applicability of the NEPRA (Electric Power Procurement) Regulations, 2022 (Regulations) of December 6, 2022.

As per sponsors, these regulations are not applicable to the projects due to the following reasons: (i) LoIs were issued for processing of Projects under NEPRA’s mechanism 2008 (cost plus) under Power Generation Policy, 2015, prior to the announcement of new regulations; (ii) tariff petitions were filed with NEPRA (ie, July 2022) prior to notification of Regulations (Regulations cannot be applied retrospectively) (ie, December 2022); (iii) new CTBCM regime under NEPRA Act is applicable from April 30, 2023 much after filling of tariff petitions for the projects; (iv) projects are excluded from the applicability of regulations under clause (1) of the said Regulations which is reproduced as follows: (a) any power purchase agreement that has been executed prior to notification of these regulations; and (b) any electric power procurement approved prior to notification of these regulations under the relevant policy approved by the Council of Common Interests (CCI).

Copyright Business Recorder, 2024