ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved a seven-year (2023- 29) KE investment and losses reduction plan with conditionalities, estimating investment of Rs 392.5 billion and bringing down losses to 12.63 per cent from current level of 14.58 per cent.

The Authority, which was being grilled at different forums for undue delay in unveiling its decision has final released it, a day after a meeting at the SIFC held prior to Prime Minister’s visit to Saudi Arabia as Saudi Arabia has expressed reservations at the delay in approvals, said an insider.

As per provisions of Section 32 of the NEPRA Act, 1997 read with para 23 of NEPRA Guidelines for Determination of Consumer-end Tariff (Methodology and Process) 2015 the decision to approve was given to the investment plan and losses assessment of K-Electric for next seven years for Multi Year Tariff (MYT) control period from FY 2023-24 to FY 2029-30.

The decision states that the power utility company will make investment of Rs 62.554 billion in FY 24 followed by Rs 66.548 billion in FY 25, Rs 67.899 billion in FY 26, Rs 64.364 billion in FY 27, Rs 56.874 billion in FY 28, Rs 39.264 billion in FY29 and Rs 34.995 in FY 30.

The approved average Transmission and Distribution (T&D) losses targets are as follows: (i) 14.58 per cent for FY 2023-24; (ii) 14.27 per cent 2024-25; (iii) 13.83 per cent 2025-26; (iv) 13.39 per cent in 2026-27; (v) 13.07 per cent in FY in 2027-28 ;(vi) 12.82 per cent 2028-29 and 12.63 per cent in FY 2029-30.

The benefit of additional reduction in losses for that particular year would be shared with consumers and K-Electric in ratio of 75:25 respectively. Other terms and conditions of investment plan and losses reduction plan will be as follows: (i) The sole right of interpretation regarding this investment plan decision rests with the Authority. In the event that the Petitioner or any other stakeholder requires clarification on this decision, they may seek clarification directly from the Authority beforehand.

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Any expenses incurred by the Petitioner without clear provision will be at their own risk and cost; (ii) KE is directed to make the best efforts to procure materials and services in a manner that ensures the most cost-effective prices for project execution;(iii) The Petitioner shall clearly document both the investment projects and repair and maintenance projects, ensuring there is no duplication between them.

The third-party audit/monitoring shall verify this aspect during regular audits; (iv) KE shall file modification in its transmission license to include the 500 kV assets for construction, ownership, operation and maintenance; (v) The Authority decides for a comprehensive 3rd party independent Monitoring/Audit of K-Electric’s allowed investment plan.

The Third Party Audit/Monitoring of allowed investments will be carried out on quarterly basis. The ToRs and mechanism of 3rd party Audit/Monitoring will be formulated by NEPRA. The Authority also decides to include an indicative cost of Rs.200 Million in the investment plan of KE for the purpose of 3rd party Audit/Monitoring of Investment Plan.

The amount shall be subject to adjustment upward/downwards based on the cost approved by NEPRA for the Audit;(vi) KE shall ensure zero fatal accidents goal and shall ensure safe working environment for its employees and general public by utilizing approved investment by the Authority against safety plans; (vii) KE shall also submit a quarterly progress report showing utilization of allowed investment, physical progress and analysis regarding the benefits accrued against amount incurred for each project highlighted under different heads for monitoring purpose on quarterly basis.

Moreover, KE shall also provide the above progress on online portal specified by NEPRA for monitoring of investment plan; (viii) KE shall submit progress report for the performance indicators (T&D losses. SAIFI. SAIDI, Reliability, Continuity & Quality of Power Supply and other performance standards) achieved as result of implementing investment plan approved by the Authority.

Moreover, KE shall also provide the above progress on online portal specified by NEPRA for monitoring of investment plan; and (ix) The Authority also directs KE that in the event where the planned projects are delayed (due to change in demand or some other reasons) beyond the approved timelines, then KE shall timely approach the Authority to explain the reasons of delay and seek the revised approvals.

Copyright Business Recorder, 2024


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