Administrative control: Nepra starts challenging energy ministry

The National Electric Power Regulatory Authority (Nepra) is said to have started challenging the Ministry of Energy (Power Division) after formally coming under the administrative control of Power Division. This was reflected in recent decisions of the regulator in which fines of Rs 10 million each were imposed on Peshawar Electric Supply Company Limited (PESCO) and Central Power Purchasing Agency (Guarantee) Limited (CPPAG) on account of non-execution of Power Purchase Agreement (PPA) with Pakhtunkhwa Energy Development Organization (PEDO) regarding 18 MW Pehur Hydel Power Project since March 01, 2010.
This decision has come just one day after the regulator imposed Rs 5 million on National Transmission and Despatch Company (NTDC) for non-compliance of Performance Standards Transmission Rules, particularly with respect to voltage and frequency fluctuations.
The Authority has concluded that Pesco failed to execute PPA for the last 7 years and has purchased power on rates not approved by Nepra. Nepra claims that during the legal proceedings, Pesco failed to submit any plausible reason for non-payment of dues. It also failed to comply with the directions of provision of information required by the Authority and disregarded the letter written in this respect.
Keeping in view the violations committed by Pesco and the gravity of such violations, the Authority has declared Pesco delinquent under rule 4(13) of the NEPRA (Fines) Rules, 2002 and has decided to impose a fine of Rs 10 million on Pesco under Nepra (Fines) Rules, 2002. Regarding the CPPA-G, the Authority has observed that under the NEPRA (Market Operator Registration, Standard and Procedure) Rules, 2015, it is the duty of CPPA to procure power on behalf of Discos. However it failed to fulfill its obligation and forced the power producer to agree on terms and conditions which were never approved by the Authority.
After careful analysis of available documents, the Authority has declared CPPAG as delinquent under rule 4(13) of the NEPRA (Fines) Rules, 2002 and imposed a penalty of Rs 10 million on CPPAG. The Authority further decided that in case of non-execution of PPA within three months, a fine of Rs 0.5 million per day shall be imposed on the delinquent.