Nepra, Ogra laws to be amended: Trying to insulate regulators from govt interference

ISLAMABAD: The caretaker Federal Government has decided to amend National Electric Power Regulatory Authority (NEPRA) and Oil and Gas Regulatory Authority (OGRA) Acts aimed at empowering both regulators from government’s interference in notifications of electricity and gas tariffs in future, sources close to caretaker Minister for Power and Petroleum told Business Recorder.

The decision was taken at the latest meeting of Cabinet Committee on Energy (CCoE) which has also been ratified by the caretaker Federal Cabinet.

On February 23, 2024, the CCoE was informed that the Power Division had been working on the market reforms with an aim of transitioning the electricity market model of Pakistan from Single Buyer Model to Competitive Trading Bilateral Contract Market (CTBCM). In this regard, Power Division presented CTBCM Model and Roadmap to the Cabinet Committee on Energy in a meeting on March 27, 2020.

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The CCoE demonstrated keen interest in the implementation of electricity market reforms, stating it as one of the most critical and important activity and decided to directly monitor the CTBCM implementation.

Power Division was also directed by CCoE to submit a Monthly Report to the CCoE on the progress achieved towards implementation of CTBCM. In compliance with the direction of CCoE, Power Division had prepared the latest monthly reports on the progress of CTBCM for the month of January, 2024.

The first part of this progress report highlights the key updates on CTBCM including CCoE’s approval on the submission of final test run report to NEPRA and its ratification by the Federal Cabinet. The second part focuses on the readiness of the power sector for the competitive wholesale electricity market in Pakistan.

The last part of the progress report presents the status update on the completion of the actions planned under the CTBCM Test-Run Phase.

Power Division submitted the progress Report on the implementation of CTBCM for the months of January, 2024 before CCoE in compliance to its direction.

During the ensuing discussion, it was pointed out that there was a need to expedite the CTBCM since a lot of time had passed. It was agreed that PPIB should complete all the necessary work in this regard by March 2024 and NEPRA should complete its part by June 2024

It was also pointed out that necessary amendments in NEPRA and OGRA Acts may be made and submitted to CCoE so that regulators were made independent in notifying tariffs for various categories instead of involving government. It was also pointed out that respective appellate tribunals should be created where needed to hear complaints and government should withdraw itself from indulging in tariff determination.

The government may issue policy statement accordingly. The CCoE further directed the Power Division/PPIB and NEPRA to complete all the relevant tasks for implementation of CTBCM by March and June 2024 respectively.

The CCoE also directed the Power and Petroleum Division to prepare necessary amendments in NEPRA and OGRA Acts to make these independent in notifying tariffs without involving government in future and should also provide for creation of appellate tribunals, where required, to hear complaints. These amendments would be submitted to the CCoE.

Copyright Business Recorder, 2024