ISLAMABAD: National Electric Power Regulatory Authority (Nepra) is facing a catch 22 situation with respect to approval of new tariff for 1600-MW of tri-fuel Kot Addu Power Plant (Kapco) after CPPA-G and Multan Electric Power Company (MEPCO) showed reluctance to take power from the plant at a tariff ranging from Rs 28 per unit to Rs 77 per unit for different generating units.
The Authority comprising of Chairman Nepra Waseem Mukhtar, Member (Technical) Sindh Rafique Ahmad Shaikh, Member (Tariff and Finance) Mathar Niaz Rana, Member KPK Maqsood Anwar Khan and Member (Law) Amina Ahmed officiated a hearing in this regard.
Chief Executive Officer (CEO) Aftab Butt led the team of Kapco which responded to the issues framed by the Regulator during the public hearing. NTDC/ NPCC also shared a study with respect to system constraints.
Provisional tariff: KAPCO again moves Nepra for early approval
The Authority indicated that it would renew PPA of Kapco till 2026 or 2027 for 500-600 MW on take and pay basis for five months, May to September, for system stabilisation or to deal with system constraints.
The plant has black-start facility for operations during blackouts. However, the petitioner requested tariff for five years for entire plant instead of 500-MW as provided in the approved IGCEP.
Muhammad Yousaf, case officer of Nepra, briefed the Authority that the project was included in IGCEP due to system constraints and not merit order.
The petitioner has two-part tariff, i.e., energy component and capacity component for plant 1 on take or pay and plant 2 on take and pay basis. CPPA-G representative argued that his entity does not have the power to sign power deal with the power company. And MEPCO claimed that it has improved its own grid system after which it does not need the plant.
Member (Technical) Rafique Ahmad Shaikh maintained that plants like Kapco, Tapal and Gul Ahmad will remain in the system anyway.
The role of Senate Standing Committee on Power with respect to issuance of instructions to the power Regulator with special reference to determination of tariff for Kapco was discussed and the power company stated that the Senate Standing Committee cannot issue instructions to the Regulator.
“Standing Committee of the Senate is constituted by the upper house of the Parliament (i.e., legislative limb of government). As per the Rules of Business, 1973 and the Rules of Procedure and conduct of business in the Senate, 2012, their role is to provide advice and recommendations to the Senate,” said Legal Counsel of Kapco.
Commenting on remarks of Kapco Counsel Rafique Shaikh Member (Technical) stated it is not true that the Regulator has implemented recommendations of Senate Standing Committee, adding that the role of the latter is to give recommendations. He said that the regulator wants to discuss issues on merit.
Ministry of Planning and Development proposed that PPA of power plant be extended for three years on take and pay basis till projects started by the public sector entities become operational like two solar power projects in Mepco, i.e., 100-MW in Layyah and 600-MW in Muzaffargarh.
The Authority discussed the issue of Kapco’s application for renewal of its PPA for nearly three hours but did not reach any conclusion due to conflicting comments of stakeholders. The current tariff of Kapco is Rs 23-31 per unit.
Responding to a question, Chairman Nepra said he signed interim agreement with Kapco as Additional Secretary not as Waseem Mukhtar.
Arif Bilwani also raised questions on the tariff petition and suggested that block one should be used for generation which is more efficient. Other participants criticised the Kapco for charging higher tariff from consumers.
Copyright Business Recorder, 2023
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