ISLAMABAD: Kot Addu Power Company (Kapco) has filed an application with National Electric Power Regulatory Authority (Nepra) for provisional tariff based on revised classifications and till renewal of Power Purchase Agreement (PPA) with Central Power Purchasing Agency -Guaranteed (CPPA-G).
Power Division, CPPA-G and Nepra have already been grilled by Senate Standing Committee on Power headed by Senator Saifullah Abro, for allegedly extending undue favour to the company, despite expiry of its PPA. All the public sector stakeholders defended the decision to extend PPA for one year and on getting electricity on take and pay basis.
Chief Executive Kapco Aftab Mahmood Butt, in a letter to Chief Executive Officer (CEO) CPPA-G, stated that the company has filed tariff petition with Nepra for provisional tariff as CPPA-G has not entered in to PPA with it.
The power company noted that switchyard facility was an integral part of the generation facility under original PPA (i.e., composite tariff). However, in the revised tariff, the switchyard facility is treated separately from the generation facility. Both the generation facility and switchyard facility are offered for five years on-terminus basis. The power company has submitted tariff petition with revised and reasonable fixed O&M cost, cost of working capital, return on equity, variable O&M and fuel cost component in line with Nepra approach for recovery of all costs and return reasonably at 30 percent load factor.
The power company has claimed that as indicated by National Power Control Centre (NPCC), its power complex will be required in the summer months to avoid local area energy shortage due to both operational and technical reasons.
Provisional tariff application states that as the summer season is at hand and tariff determination by Nepra requires substantial time, the power company has also filed an application for the approval of provisional tariff, which if approved by the Regulator, will provide support to the system.
According to the company, it has sufficient inventory of fuel stock (LSFO) of around total 64,000 MTs at site while around 40,000 MTs is available with PSO, ordered/ received under the power purchaser’s dispatch requirements under the original PPA. This availability of imported fuel will not only support the system during the upcoming summer (including Ramazan), on short notice but will also prevent any additional impact on the already depleted foreign reserve situation of the country.
“We have requested Nepra to direct CPPA-G to enter into a PPA with Kapco on behalf of supplier of last resort (Disco) also because CPPA-G is still agent of Discos,” it stated.
The application for the grant of a provisional approval of reference generation tariff and switchyard charges pursuant to Rule 4(7) of Nepra Rules, on an urgent basis, following the petitioner to supply power to the power purchaser and making the switchyard facility available during the period between the date of provisional tariff application approval till the time the Authority arrives at its final determination with regard to the tariff petition.
Keeping in view the requirements of NTDC/ MEPCO and IGCEP 2022-31 duly approved by NEPRA, Kapco has submitted the following revise classification of its power plant for tariff determination ; Plant -1( take or pay) (i) EB-1, and EB-IIA are specifically requested by NTDC and minimum 500-MW is required in IGCEP from these energy blocks; (ii) (EB-II) although, this energy block is not included in IGCEP, Black-start facility is connected to this block. Hence, it has been kept in plant-1 and (iii) EB-III( plant 2 - take and pay), based on company’s past experience, plant 2 will be required to support the system to meet operational contingencies, high demand, low gas availability, increased load demand especially on 132 KV as EB-III is connected at 132-KV.
On June 27, 1996, following international competitive bidding by the Privatisation Commission Government of Pakistan (the “Privatisation Commission”), the Company was privatised. At the time of privatisation and following privatisation, WAPDA divested 36% of its shareholding in the Company to the strategic investor. In August 2013, the strategic investor sold its entire shareholding in the Company to local corporate entities and individuals. The gross capacity of plant was 1638-MW.
Copyright Business Recorder, 2023