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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved modification in the generation licence of the Water and Power Development Authority (WAPDA), to the extent of changes in auxiliary consumption of various hydel power plants and the addition of 1,530 MW Tarbela 5th Extension.

The authority granted a generation licence to the WAPDA on November 3, 2004, and subsequent modifications were made to it for a cumulative installed capacity of 17,367.96 MW.

The WAPDA in accordance with Regulation-10(2) of the NEPRA Licencing (Application, Modification, Extension and Cancellation) Procedure Regulations, 2021, communicated a Licencee Proposed Modification (LPM) in its generation licence on October 01, 2021.

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In the “text of the proposed modification”, the WAPDA submitted that it intends to include 1,530 MW Tarbela 5 Extension Hydropower Power Project in its generation licence which will increase the total installed capacity from 17,367.96 MW to 18,897.96 MW.

Further, it has also proposed to revise/actualise the auxiliary consumption of its 24 hydel power stations from 13.7 MW to 24.2 MW in Schedule-Il of its Generation Licence.

The public hearing in the matter was held on July 06, 2022, at the NEPRA Headquarters, Islamabad. In the hearing, the WAPDA gave a detailed presentation on the various issues framed in the matter.

The authority sought comments from the stakeholders. The authority reviewed the comments of stakeholders and in view of the observations of the CPPA-G and the Punjab Power Development Board (PPDB), considered it appropriate seeking perspective of WAPDA on the same. In response to the comments of CPPA-G, it was submitted that the auxiliary consumption of each hydropower station was not mentioned in the original licence. It was included in Schedule-II of Modification-II and auxiliary consumption limits defined, therein, were very reasonable and as per actual consumption (approximately), however, the same was not mentioned in Modification-III.

Later on, the authority reduced the auxiliary limits in Modification-IV which is not according to normal practices being allowed to Independent Power Producers (IPPs) recently which is 1-2 per cent of the installed capacity of the generation facility.

In this regard, a technical committee was constituted by the secretary Ministry of Water Resources, being Principal Accounting Officer to define the auxiliary consumption limits of all operational Power Houses of WAPDA based on the present operational characteristics of the plants, to address the audit observations. The committee submitted its report and recommended to revise the limits of auxiliary consumption.

The committee has thoroughly justified the said limits of each WAPDA Hydel Power Station with all documentary evidence/calculations given in the report.

Regarding the query of utilisation of auxiliary consumption within power plants or otherwise, it has been confirmed that the auxiliary power including metered/un-metered losses, due to technical limits of the installed equipment is only consumed within the power plant and are not used for any other purpose.

The WAPDA submitted that it is a public sector entity and there is neither any precedence/revision nor any financial resources available under the approved tariff for such technical audit. It owns 21 operational hydel power stations and any such technical audit of each power station shall likely require vigorous measurements at multiple points. So this activity, spanning over a lengthy duration will involve different professionals, having a significant financial impact on WAPDA without yielding any result.

It is pertinent to mention that other hydel IPPs are allowed auxiliary consumption to the tune of 1-2 per cent of the installed capacity of the power plant. In this regard, a comparison is made which clearly depicts that the auxiliary limits of WAPDA Power Stations are at par with that of hydel IPPs. As long as the power plant remains within the prescribed limit, no such audit is required to be conducted.

The PPDB commented that on one side, the committee has recommended to increase the auxiliary consumption based on the installed capacity and on the other hand, reduced the availability of power plants as approved by the authority. The PPDB pointed out by WAPDA that consumer tariff will not increase which is against the tariff norms as enhancement of auxiliary consumption as well as outages will further increase the tariff.

On the observations of the PPDB, it was stated that the revision of allowance/availability, as proposed by the Committee falls under the Power Purchase Agreement (PPA), and extensive maintenance is required for better reliability of the old generating units.

The hydropower plants of WAPDA are the cheapest source of energy so their reliability cannot be compromised for lowering the basket price of the electricity for consumers. The proposed modification will not have any impact on the consumers. The operational characteristics of the WAPDA hydel power stations will remain the same therefore; it will not impact the tariff.

The WAPDA Hydel Power Stations are playing an important role for supply of affordable/cheap electricity to consumers.

WAPDA reiterated that it has submitted an application for modification in its generation licence keeping in view the provisions of the relevant regulations as NEPRA is the ultimate authority for such modification. Therefore, it is not correct that the authority’s powers are being used to satisfy audit objections.

The authority has observed that according to the communicated LPM, the Licencee/WAPDA now plans, (a) revision of the auxiliary consumption of its 16 out of 24 Hydel Power Stations; and (b) addition of 1,530 MW Tarbela Fifth Extension in its generation licence.

In this regard, the Authority in terms of Section-26 of the NEPRA Act read with Regulation-9(2) of the Licencing Regulations, is empowered to modify a licence as it may deem fit if, in the opinion of the authority, such modification, (a) will not adversely affect the performance by the licencee of its obligations; (b) is reasonably necessary for the licensee to effectively and efficiently perform its obligations under the licence; (c) is likely to benefit consumers; or (d) is reasonably necessary to ensure the continuous, safe and reliable supply of electric power to consumers, keeping in view the financial and technical viability of the licencee.

The authority has also approved another modification for the inclusion of Mohmand Dam for which a separate determination is being issued. The consolidated changes to be reflected in the Generation Licence are included in the determination for Mohmand Dam.

The approval of the LPM will be subject to the provisions contained in the NEPRA Act, relevant rules framed there under, terms & conditions of the Generation Licence and other applicable documents.

Copyright Business Recorder, 2024

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