Government all set to redefine load-shedding

ISLAMABAD: The Government is all set to tailor a new definition of electricity load shedding by altering Nepra Act and Performance Standards aimed at legalising revenue-based load shedding across the country under the garb of Aggregate Technical and Commercial (AT&C) losses, a long-standing desire of Power Division which will deprive poorest of the poor of their fundamental right to electricity.

According to the Power Division, the government is continuously working towards the resolution of multifarious challenges surrounding the country’s power sector, adding that increasing trend of circular debt is making both the sector and the economy financially unviable.

Power Division maintains that major reasons for increasing circular debt include huge line losses, less recoveries, and theft of electricity. Distribution Companies carry out revenue-based load shedding in areas with high line losses. On the other hand, given the trend of sharp increase in power price for the central pool, at times it also becomes economically and financially imprudent to purchase such costly electricity for delivery to consumers.

Revenue-based power load-shedding to continue: govt

Power Division argues that though out of economic compulsions in such situation a well-structured load shedding is only feasible solution for viability of power sector; however, Nepra and other legal forums have discussed economic load shedding policies and implementation and have highlighted the need for bringing load shedding due to economic or revenue compulsions into the legal framework, and advised to incorporate certain amendments in the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (the “Nepra Act”) so that a robust regulatory framework could be created there under.

The Prime Minister while chairing a series of meetings to deliberate power sector reforms on 15, 18th, and 25 April 2024 directed the Power Division to review and propose amendments in existing legal and policy frameworks about Policy and AT&C based load management in the country.

To initiate such legal, policy, and regulatory changes, the Power Division notified a committee with members from the PPIB, CPPA, Law Division, Nepra, and independent legal and regulatory experts. The committee reviewed the existing arrangements threadbare, examined provisions of the Constitution and Acts as well as the economical, technical, and commercial aspects of the policy measures of economic load shedding and distribution license obligations which have deteriorated and exceeded the obligations of the federal government. The committee reviewed the existing provisions including Section 34 of Nepra Act, definition under 4 (f) of the Performance Standards Rules of 2005, Terms and Conditions of distribution licensees, various judgments of superior courts, National Electricity Policy 2021, strategic directive 5(b) of NE Plan, and Nepra advisory to Discos of February 2022, etc.

After detailed deliberation, the Committee submitted its detailed Report on July 31, 2024, for consideration and approval by the competent forum. The committee has proposed amendments not only in the Nepra Act (and has drafted a Bill along with the statement of objectives for Parliament) but also in the Nepra Performance Standards (Distribution) Rules 2005.

The sources said that Power Division has endorsed the recommendations in the report, considering the same as critical for the sector, and recommends immediate implementation.

Based on the recommendations and amendments proposed in the Nepra Act and Rules, Cabinet Committee on disposal of Legislative Cases (CCLC) has been requested to review and recommend the amendments for approval by Cabinet for onward consideration by the Parliament:

Proposed amendments in the Nepra Act are as follows: “Insertion of the following definition in section 2 clause VII-A, of Regulation of Generation, Transmission and Distribution of Electric Power Act (Nepra Act) XL of 1997 as amended: load shedding means the process of removing, either manually or automatically, the consumers’ load from the power system under intimation/ publication in advance, planned due to technical, commercial, and/ or economic considerations as approved by Authority from time to time.”

The Committee has also recommended that the following may be substituted in sub-section V of Section 34, of Regulation of Generation, Transmission and Distribution of Electric Power Act (NEPRA Act) XL of 1997: “(v) principles and priorities of load shedding provided; however, where load shedding is necessitated due to economic constraints, the federal government may from time to time issue policy guidelines which shall be binding on the Authority and licencee(s); provided further that in the formulation of such policy guidelines, the federal government shall be guided by the principles of equality and non-discrimination among the various classes of consumers.”

As the new proposed in Nepra Act and Performance Standards are cleared from the CCLC and subsequently from the Federal Cabinet, these will be tabled before the National Assembly and Senate for final approval.

According to sources, Finance Division has asked Power Division to share views of Nepra and NTDC on the proposed amendments on revenue-based load shedding.

Copyright Business Recorder, 2024