ISLAMABAD: The National Transmission and Despatch Company (NTDC) on Wednesday accused the National Electric Power Regulatory Authority (NEPRA), the power sector regulator, of unleashing disproportionate deductions under the garb of transmission constraints, which may turn into financial doomsday for the company.
These accusations were hurled against the regulator during a public hearing on CPPA-G’s request for positive adjustment of Rs 1.84 per unit for August 2023, financial impact of which has been calculated at Rs 28 billion.
According to Chief Executive Officer (CEO) Rehan Akhtar since Fuel Price Adjustment (FPA) of Rs 1.45 per unit for July is to be paid in September’s bills, net increase in FPA for October bills will be Rs 0.37 per unit.
NEPRA Authority, comprising Chairman Waseem Mukhtar, Member (Tariff and Finance), Mathar Niaz Rana, (Balochistan) Member (Technical), Rafique Ahmad Shaikh, (Sindh) Member, Khyber Pakhtunkhwa, Maqsood Anwar Khan and Member (Law) Amina Ahmad (Punjab) officiated the public hearing. However, NEPRA’s team did not share final numbers of impact contrary to past traditions.
NEPRA’s Members particularly Maqsood Anwar Khan and Rafique Ahmad Shaikh scolded NTDC and NPCC representatives for continued transmission constraints due to which cheap generation is not being supplied to the consumers.
The NTDC/NPCC official confessed existence of transmission constraints in South as wind power is not being transmitted to the system but at the same time, argued that if revenue based electricity load shedding is eliminated in South Region, financial impact of constraints will be reduced.
The NEPRA’s Monitoring and Enforcement (M&E) Section stated that the regulator has withheld over Rs 26 billion so far due to system constraints.
Qaiser Khan, a representative of NTDC, noted that the company was making all-out efforts to remove constraints, but in the past there were hurdles in opening of Letters of Credit (L/Cs) to the tune of 95 per cent of imported material/equipment, adding that NEPRA has deducted NTDCs Rs 40 billion which has multiplied its financial woes. He mentioned a judgement of High Court in which the latter ordered release of Rs 15 billion.
“If an amount of Rs 40 billion would have been spent on improvement in transmission constraints, there would have been substantial improvement,” he said.
Responding to NTDC official, Member (Technical) Rafique Ahmad Shaikh revealed that NEPRA has arranged third part audit of NTDC’s system constraints to be conducted through power sector’s best professionals, which is not good news for NTDC. Chairman NEPRA promised to share audit report with the NTDC before taking any further action against it.
Another official of NTDC who was representing CFO, maintained that there were months when deductions by NEPRA were higher than overall revenue of NTDC, adding that NTDC is a national asset and if disproportionate deductions continue, it will face financial doomsday.
Member (Tariff and Finance), Mathar Niaz Rana, raised the issue of imported coal project which was given substantially low dispatch in August as compared to RLNG plants. However, Wajid Chattha of NPCC noted that except Lucky Power Plant, all other imported coal plants were low in economic merit order as compared to RLNG.
CEO, CPPA-G Rehan Akhtar also elaborated on the reasons behind more dispatch from RLNG plants as compared to imported coal-fired plants.
NEPRA also displayed SSGC letter dated August 29, 2023, and noted that MoE on May 30, 2023 issued following directives/policy guidelines regarding revocation of its earlier directives of March 27, 2008 for issuance of NOCs to captive power plants for sale of surplus power to DISCOs: “The earlier directives of March 27, 2008 had asked SSGCL & SNGPL to issue NOC to CPPs for sale of surplus power to DISCOs may be revoked. Moving forward both gas companies would not issue such NOC to CPPs.”
According to the NEPRA, in compliance with MoE directives, SSGC revoked NOCs issued to various CPPs for sale of surplus power to Discos/National Grid.
The CEO, CPPA-G, however, argued that he had just seen the letter during the meeting, and pledged to respond to it accordingly. After hearing the arguments from respective parties, the Authority reserved its decision on the application of CPPA-G, which will be announced after further deliberations.
Copyright Business Recorder, 2023