Failure to sign BSPs, finalise OPMs: Nepra issues show-cause notices to CPPA-G, NTDC

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has issued show cause notices to Central Power Purchasing Agency–Guaranteed (CPPA-G), the Market Operator (MO) and National Transmission and Despatch Company (NTDC) on failure to sign black start procedures (BSPs) and finalize operating procedure manuals (OPMs) of all power plants.

Sharing the background of show cause notice, the power sector regulator stated that a total power system collapse occurred on January 09, 2021 which plunged the whole country into darkness and the system was completely restored on January 10, 2023 after a lapse of20 hours.

The Nepra being the regulator of the power sector took serious notice of the incident and constituted an Inquiry Committee (IC) to probe the matter.

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The IC conducted the inquiry and submitted a comprehensive report before the Authority on the basis of which the Authority inter- alia decided to initiate legal proceedings against different power plants on account of non-submission of operating procedures manual as per the requirement of Rule 16(1) of the NEPRA Licencing (Generation) Rules, 2000.

According to NEPRA, explanations were issued to concerned power plants followed by show cause notices. Hearings in the matter were scheduled on 6th, 7th and 8th September 2022, wherein, the representatives of NPCC and CPPA-G also participated.

During the hearings, a number of power plants adopted the stance that they have submitted the draft operating procedures manuals to NPCC and CPPA-G for approval, however, the same have not been signed by NPCC and CPPA-G.

In view of the foregoing, the Authority directed NPCC and CPPA-G to finalize the operating procedures manuals of all power plants in coordination with relevant stakeholders and to sign the black start procedures with power plants on which the black start facility is available but not active i.e. Orient, Sapphire, Halmore, Engro Powergen Qadirpur, Rousch and Foundation Power within one month. However, it was not done despite lapse of stipulated time.

The Authority, during the public hearing held on February 28, 2023 in the matter of Fuel Charges Adjustment (FCA) of Discos for the month of January 2023, took serious notice of the non-finalization of operating procedures manuals of all power plants and non-signing of black start procedures with concerned power plants.

Subsequently, as per directions of the Authority, a joint meeting of NEPRA, NPCC and CPPA-G was held on March 10, 2023, wherein the confronting issues were deliberated in detail and it was reiterated to comply with the directions of the Authority by engaging all the relevant stakeholders.

Accordingly, an email of March13, 2023 was sent to NPCC and CPPA-G, wherein, they were required to submit some essential information pertaining to the matter. A letter dated March 22,2023 was also issued to NPCC and CPPA-G, wherein, they were directed to submit a concrete plan along with timelines regarding finalization of the operating procedures manuals of all power plants and activation/commissioning of the black start facility available at different power plants.

The Authority observed with great concern that the operating procedures manuals of all power plants have still not yet been finalized and the black start procedures with concerned power plants have still not yet been signed despite lapse of a considerable time and repeated directions of the Authority issued from time to time in this regard.

The Nepra observed that the Power Purchaser has prima facie violated Section 48 of the NEPRA Act, by not complying with the repeated directions of the Authority issued from time to time regarding finalization of operating procedures manuals of all power plants and signing of black start procedures with concerned power plants.

NEPRA Act falls within the definition of “Applicable Documents” as defined under NEPRA (Fine) Regulations, 2021 and for any violation of the Applicable Documents, fine could be imposed by the Authority.

The Power Purchaser, ie, CPPA-G has been called upon under Regulation 4(1) & 4(2) of the Fine Regulations, 2021 to either admit or deny the occurrence of the violation and explain its position in this regard within fifteen days, failing which, it shall be presumed that the occurrence of the violation is admitted by the Power Purchaser, and the Authority shall proceed further on the basis of available record in accordance with the law.

The response of the “Explanation” was submitted by the Licencee in its letter of December29, 2023, wherein, the Licencee has denied the said violations on account of the reasons mentioned therein.

However, the Regulator stated that the response of the Explanation submitted by the CPPA-G was duly examined and considered by the Authority in terms of Rule 4(7) of the. Fine Regulations, 2021 and the Authority observed that the CPPA-G did not submit satisfactory explanation, therefore the Authority rejected the response of Explanation submitted and passed an Order on October 11, 2024, recording the reasons of such rejection.

The NEPRA has called upon the CPPA-G to Show Cause immediately but not later than fifteen days of receipt of the notice as to why an appropriate legal action may not be taken against it under the NEPRA Act for violations of the NEPRA Act, rules, codes that may, inter alia, include a minimum fine often million Rupees which may extend to two hundred million Rupees and, in the case of a continuing default, with an additional fine which may extend to one hundred thousand Rupees for every day during which the contravention continues. CEO CPPA-G may also specify if it would like to be heard in person.

“In the event no response is received from you (CEO CPPA-G) and (MD NTDC) within given time, it shall be presumed that the Organisation has nothing to say in its defence and the matter shall be decided in accordance with the law on the basis of available record that may result in imposition of any penalties provided in the NEPRA Act,” states the Show Cause Notice.

Copyright Business Recorder, 2024