Nepra renews distribution and supplier licence to KE

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has renewed the power distribution and supplier licence to K-Electric Limited in terms of Sections 20 and 21 of the NEPRA Act along with terms and conditions.

According to the NEPRA’s decision, the grant of licence will be subject to the provisions contained in the NEPRA Act, relevant rules, regulations framed thereunder and other applicable documents.

The NEPRA had conducted a public hearing on both distribution and supplier, which was attended by different public and private sector stakeholders.

Power sector: Nepra backs transition from Libor to ‘SOFR’

The authority received comments from 13 stakeholders including, (i) Landhi Association of Trade and Industry (LATI); (ii) All City Tajir Ittehad Association (ACTIA); (iii) Faisalabad Electric Supply Company Ltd (FESCO); (iv) Ministry of Energy Petroleum Division (MoEPD); (v) Shaheen Industries; (vi) Karachi Electric Supply Company Labour Union (KESCLU); (vii) Lasbela Industrial Estates Development Authority (LIEDA); (vii) Association of Builders and Developers of Pakistan (ABAD); (viii) Administration Union Committee No 12, Singo Lane/Syedabad District South Karachi (AUCSL); (ix) Korangi Association of Trade and Industry (KATI); (k) Roshan Pakistan Karachi (RPK); (x) Pakistan Civic Society (PCS), and (xi) District Municipal Corporation Malir (DMCM) etc.

According to the determination, the authority considered that KEL cannot be refused to grant a distribution licence in the absence of the required rules and therefore, it decided to move ahead with the request of KEL for the grant of a distribution licence.

The federal government has notified the distribution rules.

In this regard, the KEL has confirmed that it complies with the distribution rules and the authority directs KEL to submit a detailed report in this regard within six months from issuance of this licence.

The regulator has further stated that regarding the provisions of Section-20(2) of the NEPRA Act, KEL has already provided the required details pertaining to (i) the type of service for which the licence is being sought; the territory in which the electric power shall be distributed and the source and scope of electric power etc.

About the term of the distribution licence, the authority has considered Rule 5 of the Distribution Rules which stipulates that the minimum term of such licence will be 20 years.

In view of the said, the authority fixes the term of this licence for 20 years from the date of its issuance.

Regarding the tariff, it is clarified that under Section-7(3)(a) of the NEPRA Act, determining of tariff, rate and charges, etc is the sole prerogative of the authority. In view thereof, the authority directs KEL to charge the consumers only such tariff which has been determined/approved or specified by the authority.

The KEL submitted its application for the grant of supplier licence on May 26, 2023, and at that time, the said Rules, were not notified.

However, in order to avoid any regulatory gap, the authority decided to process the application in the absence of supplier rules in the pronouncements of the superior court of Pakistan, wherein, it has been determined that the absence of the rules or inaction of the government functionaries to frame the rules cannot be held to be prejudicial to the rights of the other party.

In view of the said, the authority considered that KEL cannot be refused to grant a supplier licence in the absence of the required rules and therefore, it decided to move ahead with the request of KEL.

Regarding supply, the NEPRA is of the view that it is relevant to mention that in terms of Section 23E of the NEPRA Act, the authority may grant a licence authorising a company to engage in the supply of electric power business. In this regard, the said section prescribes the eligibility criteria for the grant of such licence which includes, (i) minimum solvency requirements; (ii) minimum technical and human resource requirements, and (iii) provision with respect to SoLR; and (iv) public service obligations of the licencee including quality of service, transparency of transactions, timely collection and dissemination of payments, and effective collection and dissemination of any taxes and surcharges, etc.

Copyright Business Recorder, 2024