Questions over amendments to Commercial Code: CPPA-G faces embarrassing situation

Central Power Purchasing Agency- Guaranteed (CPPA-G) on Wednesday faced an embarrassing situation in National Electric Power Regulatory Authority (Nepra) when the representatives of most of private sector power companies raised questions on amendments to Commercial Code in accordance with the spirit of a discussion.

This was the crux of a public hearing in Nepra moderated by Saif Ullah Chatha, Member Punjab, whereas Members of KP, Sindh and Balochistan were also present.

One of the Nepra members also fingered on the intelligence level of top boss of CPPA-G in a veiled question in the public hearing room packed with the officials and top representatives of private power companies saying "I have already raised the question which might have not been understood by Lodhi,". CEO CPPA-G, Abid Lodhi had also applied for the post of Chairman Nepra but he did not get the job.

According to official document submitted to Nepra, CPPA-G claimed that a meeting of Commercial Code Review Panel (CCRP) held on October 15, 2019 under the chairmanship of CEO, CPPA-G, Abid Lodhi.

The documents also shared with Nepra state that the CCRP members were informed that M/s Kohala Hydro Power Company (Pvt.) Limited, M/s Azad Pattan Power (Pvt.) Limited, M/s Punjab Thermal Power (Pvt.) Limited, M/s Master Green Energy Limited, M/s NASDA Green Energy (Pvt.) Limited, M/s Act 2 Wind (Pvt.) Limited, M/s Gul Ahmed Electric Limited, M/s Artistic Wind Power (Pvt.) Limited, M/s Metro Wind Power Limited, M/s Din Energy Limited, M/s Liberty Wind Power 1 (Pvt.) Limited, M/s Liberty Wind Power 2 (Pvt.) Limited, M/s Tricom Wind Power (Pvt.) Limited and M/s K-Electric Limited have proposed certain amendments in the Commercial Code.

CCRP members were further informed that the Commercial Code was originally notified in year 2015. Subsequently, two amendments were approved by Nepra in the Commercial Code on the recommendations of the CCRP as per the procedure mentioned in the Commercial Code.

CCRP further proposed third amendment to the Commercial Code in the definition of the Power Purchase Agreement (PPA). Nepra further made certain amendments to the Commercial Code "without the due process" as provided in the Commercial Code which was attached with the Nepra determination for the registration of CPPA-G as Market Operator in November 2018.

CPPA-G submitted its review to Nepra to follow the due process before making amendments to the Commercial Code. Commercial Code amended in November 2018 has also not been notified in the Official Gazette of Pakistan. CCRP members noted that under the present circumstances the Commercial Code, 2015 is clearly the legitimate document however the revised Commercial Code attached with the certificate of registration of CPPA-G issued by Nepra in November 2018 is also required to be deliberated.

CPPA-G made a comparison of the Commercial Code 2015 and the Commercial Code attached with the certificate of registration of CPPA-G issued by Nepra in November 2018. CPPA-G proposed certain amendments to the Commercial Code for the consideration of the Commercial Code Review Panel.

All the proposed amendments were circulated through a email to the CCRP members and also posted on the CPPA-G website for inputs/comments (if any). In response, no comments / inputs were received. Subsequently, this meeting of CCRP has been convened to consider and approve these proposed amendments.

Commercial Code Review Panel (CCRP) decided that the Commercial Code 2015 is a legitimate document which has been published in the official Gazette of Pakistan; however, the changes made by Nepra in the Commercial Code attached with the certificate of registration of CPPA-G issued by Nepra in November 2018 should be reviewed and necessary amendments should be proposed to Nepra for approval.

Commercial Code Review Panel (CCRP) approved the amendments (with necessary modifications) to the Commercial Code as proposed by CPPA-G, M/s Kohala Hydro Power Company (Pvt.) Limited, M/s Azad Pattan Power (Pvt.) Limited, M/s Punjab Thermal Power (Pvt.) Limited, M/s Master Green Energy Limited, M/s NASDA Green Energy (Pvt.) Limited, M/s Act 2 Wind (Pvt.) Limited, M/s Gul Ahmed Electric Limited, M/s Artistic Wind Power (Pvt.) Limited, M/s Metro Wind Power Limited, M/s Din Energy Limited, M/s Liberty Wind Power 1 (Pvt.) Limited, M/s Liberty Wind Power 2 (Pvt.) Limited, M/s Tricom Wind Power (Pvt.) Limited and M/s K-Electric Limited.

CCRP authorised CEO CPPA-G to submit the report to Nepra for the proposed amendments in the Commercial Code in terms of rule 5 of Nepra (Market Operator Registration, Standards and Procedures) Rules, 2015 read with clause 3.4.4 of the Commercial Code.

During the hearing at least six or seven representatives of private power producers raised questions on some of the proposed amendments including payment preference, Energy Purchase Price(EPP), Power Purchase Agreements (PPA) and few other amendments. One of the representatives of a private power company even accused CPPA-G of not uploading the minutes by CCRP on the due time and date due to which his company did not submit a proper reply. When one of the Nepra members claimed that Lodhi has stated "on oath" the minutes were uploaded on the due time and date, the representative of a private power company challenged the claim of CEO CPPA-G. He offered that both of them should be called and ask for oath. He suggested that hearing should be put off for few days so that the private power sector could prepare its response. However, the moderator, Saif Ullah Chatha, poured water on a fiery situation and asked the representative of that private power company to submit his response proposed amendment within ten days.

Maqsood Basra of Atlas Power also suggested some alteration in the proposed draft of Commercial Code.

Nepra underscored the need for petitioner and private power producers for sitting together to resolve differences on proposed amendments in Commercial Code.