Energy regulators to be merged for better regulation

ISLAMABAD: The government has decided to merge Nepra, Ogra and Neeca to form a unified regulator to ensure integrated oversight of the country’s energy sector.

This is part of the draft National Electricity Plan 2022-26 of Ministry of Energy (Power Division).

As a first step, a joint working group shall be formulated under the convenership of Power Division and comprising of Nepra, Ogra, Neeca, MoPD&SI, Petroleum Division and Power Planning & Monitoring Company (PPMC). The working group shall develop a detailed roadmap for approval by the Government, leading to establishment of a unified energy regulator by June 2024.

This first National Electricity Plan shall be applicable for the control period from the date of its notification till FY-2026. The Plan, being the strategic implementation framework of the National Electricity Policy, shall inform the subservient policy frameworks, guidelines, roadmaps and business plans of the power sector on rolling basis.

National Electricity Policy identifies three over-arching goals for the power sector, namely, access to affordable energy, energy security and sustainability. Further, the nine areas have been identified under the said policy wherein the policy directions are aimed for the attainment of aforesaid goals.

Pursuant to the Section 5.8.1 of the National Electricity Policy, PPMC has been designated as the focal entity to perform the function of integrated energy planning. Accordingly, MoE (Power Division), in coordination with MoPD&SI, shall enable transition of existing IEP Secretariat to PPMC by September 2022.

PPMC shall revisit the scope and submit high-level design of IEP for approval by the Government by March 2023. Following the approval of high-level design, PPMC shall formulate detailed design leading to development of first Integrated Energy Plan (IEP); provided that IEP shall be developed on periodic basis and approved by the Government, which shall inform the sub-sectoral policy & planning frameworks.

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According to the NEP, increased cross-border electricity cooperation can help bring down electricity prices, enhance resilience, aid high penetration of renewables and facilitate clean energy transition.

Guidelines shall be formulated by MoE (Power Division) and approved by the Government that shall facilitate import/export of electricity through regional integration. Such guidelines shall include provisions for: (i) scope & modes of participation; (ii) institutional framework & definition of roles; (iii) eligibility & evaluation methodology; (iv) tariff; (v) regional planning & system operations; and (vi) security package.

The CASA-1000 interconnect (primarily designed for import of electricity) shall also be utilized for export of electricity through bilateral/multilateral arrangements.

Future opportunities for cross border export and import of electricity shall be explored to enable efficient utilization of available capacity and/or energy, system stability and geo-spatial diversity. Provided further, a high-level feasibility study shall be carried out for assessment of potential avenues for regional integration.

During the currency of this NE-Plan, Transmission System Expansion Plan (TSEP) shall be developed and approved, on annual basis, along with the respective IGCEP. Provided further, PMS-based demand forecast, incorporating the impact of load management on commercial basis, shall be used for development of TSEP.

Pursuant to Section 5.3.5 of National Electricity Policy, strategic roadmaps shall be signed between Power Division) & Discos and shall accordingly be deemed part of this NE-Plan for gauging the performance of Discos. The strategic roadmap shall provide targets for Discos in following areas: (i) reduction in AT&C losses; (ii) improvement in recoveries, on account of bill collections and theft reduction; (iii) reduction in commercial load shedding; (iv) enhanced consumer services through reduction in number of consents/approvals, development & strengthening of safety management system; (v) deployment of SCADA at transmission network of Discos (phase-4); (vi) completion of GIS mapping of distribution network; (vi) phased deployment of AMI in each Discos based on market transition and cost-benefit; (vii) amendment and updating of respective HR manuals; and (ix) business process automation through Enterprise Resource Planning (ERP).

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The system operation function shall be strengthened to perform the functions envisaged under the CTBCM design and implementation roadmap approved by the Government. Provided further, the functions of system planning, including generation planning, high level transmission planning and load forecasting shall be institutionalized in system operations role.

Share of indigenous resources shall be progressively increased in the generation mix. It is envisaged that pursuant to the stipulations of National Electricity Policy and this NE-Plan, share of indigenous resources in generation mix shall increase to 60% and 75% by FY-2025 & FY-2030, respectively.

Protected consumers of the residential category shall be facilitated through a dedicated program, to be launched by MoE (Power Division), to enable targeting of subsidies for electricity consumers. It is aimed that by FY-2025, subsidies to the residential protected consumers shall be provided under direct disbursement mechanism.

The NEP further says that till the application of uniform tariff across the country, Government shall continue to maintain and notify a uniform tariff for all consumers of last resort suppliers. Provided further, the same shall be applicable for existing Discos even after privatization in any mode.

Incentive mechanisms/schemes shall be utilized as a tool to facilitate accelerated energy transition and economic growth. Such mechanisms shall account for: (i) predictability through consistency of policy directives; (ii) Cross sectoral integration and optimization; and (iii) efficient utilization of resources.

Copyright Business Recorder, 2022