Solar power projects: Nepra approves RfP amid strong reservations voiced by KP Member

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved Request for Proposal (RfP) documents of solar power projects with unit based benchmark tariff of Rs7.8449/kWh (3.4108 cents/kWh) for the control period of 25 years, with indexation of 70 percent on the tariff due to change in exchange rate variations on a quarterly basis, amid strong reservations by a Member of KP.

The authority has also directed the Alternative Energy Development Board (AEDB) to consider and comply with the decisions, directions and observations of the Authority as stated against each of the aforementioned issues.

Member KP, Maqsood Anwar Khan, in his dissenting note stated that in the current case, AEDB has submitted the RFP for the development of 600 MW Solar PV Power Project at Muzaffargarh before the Authority, under the federal government approved Framework Guidelines, 2022, which, in his opinion, is not appropriate and a legally sustainable framework as it appears as a parallel regime with the ARE Policy, 2019.

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Hence, he was of the considered view that development of solar PV projects under the Framework Guidelines, 2022 while ignoring the CCI approved and applicable ARE Policy, 2019 is tantamount to disregard to the CCI approved Policies and may have far reaching impact on the power sector of Pakistan adding that:“Considering the background, in my individual capacity as member, I reverently disagree with the majority of members’ decisions and my dissent may be made part of determination in the matter.”

The sources said the AEDB had also sought clarification from the Regulator on its decision regarding benchmark tariff for solar projects.

The AEDB, in its letter has appreciated the provision of requisite clarifications on the issues of dedicated solar debit account and project cost/debt-equity ratio vide the referred letter.

However, regarding the provision of one-time indexation of 30% tariff with the exchange rates at Financial Close/COD, the AEDB maintains that the requirement for filing a review motion for decision in the matter is not required.

According to the AEDB the issue of providing one-time adjustment of 30% of the tariff is not a new issue, as the same also came under discussion during the public hearing held on January 9, 2023. Several comments were provided by the attendees/stakeholders on this particular issue while discussing issue No. 8 framed by the Nepra pertaining to indexation of 70% of the tariff.

Foregoing in view, the Authority has been requested to consider the issue of one-time adjustment of 30% tariff with the exchange rates at Financial Close or at COD within the ambit of the original decision of the Authority of February 01, 2023 on the subject matter and provide its decision without a formal review motion in order to save time and enable the AEDB to initiate the process of competitive bidding at the earliest possible in the greater interest of the power sector and as per the directions of the federal government.

Copyright Business Recorder, 2023