National Transmission and Despatch Company (NTDC) has accused Nationalised Electric Power Regulatory Authority (Nepra) of violating laws in granting transmission licence to Sindh Transmission and Despatch Company (STDC).
NTDC, in its review petition has also raised several questions on the approach adopted by the regulator to grant transmission licence to a provincial entity. Nepra granted transmission licence to STDC on November 5 2019. According to the NTDC, till date, no rules have been framed to prescribe the eligibility criteria for minimum solvency requirements and the minimum technical/human resource requirements.
"In the absence of a required mechanism, the discretion of Nepra to grant such licences remains unstructured, which is contrary to the law. Moreover, NTDC has pointed out that section 18A of the Nepra Act is not a self-executory provision as it requires further legislation/steps to become effective and operative. Unless the rules are framed the rights, duties or powers given under Section 18A of the Nepra Act could not be exercised," said NTDC in its review motion.
NTDC is of the view that Nepra could not adjudicate upon or assess any application under Section 18A of the Nepra Act, until the requirements of Section 18A(2) are followed and rules, as required, were prescribed as it is a settled principle of law that if something is required to be done in a manner it shall be done in that manner alone or not at all. Contrary to the required principles, the Authority has granted the licence to STDC on the basis of the assumption that it would be able to comply with the minimum solvency requirements, minimum human resource requirements and other criterion as and when prescribed by the Authority in the future.
NTDC has claimed that apart from being unrealistic and unworkable, such a practice is unprecedented and reflects lack of application of mind by the Authority. Furthermore, such treatment is discriminatory and falls foul of the requirements enshrined under Article 25 of the Constitution in that all other license applicants are required to fulfill the criteria prescribed by the Nepra Act, rules and regulations at the time of grant of the licence, whereas for STDC, a special treatment has been carved out envisioning ex post facto compliance without any basis or force of law.
NTDC has further said that no embargo has been placed by the Authority on STDC's ability to function or undertake any projects until the prescription of the criteria, thereby, giving it a free hand to operate without first being sufficiently eligible to provide the transmission services and act as the only provincial grid company in the province of Sindh.
"This is against the letter and spirit of the Nepra Act, including Section 7(6) thereof which obliges the regulator to protect interests of consumers and companies providing electric power services, rules and regulations made under the Nepra Act, and constitutional dictates. Consequently, the determination and the licence are bad in law, discriminatory, and liable to be reviewed," NTDC maintained.
The existing legal framework administered by Authority was also not yet competent for grant of licence to a provincial grid company due to the fact that National Electric Power Regulatory Authority (Application, & Modification Procedure) Regulations, 1999 deals with the procedure for application for licences. Regulation 3(3) of the licencing regulations provides that the registrar shall not receive the application unless it is accompanied with the correct amount of application fee. Regulation 3(2) deals with the correct amount of the application fee for various categories of licences and provides that such fee is prescribed under Schedule II of the Licensing Regulations.
NTDC further argued that till date, no fee has been fixed or provided for an application for a provincial grid company. In the absence of such rules the entertaining of application by the Authority was in non-compliance with regulation 3(3) of the licensing regulations. Similarly, regulation 3(6) of the licencing regulations read with schedule III provide for a non-exhaustive list of the documents which shall be provided in support of an application. Till date, schedule III has not been amended to provide for any list of documents for license of the provincial grid company.
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