NEPRA notifies upfront tariff for CPPs

KARACHI: National Electric Power Regulatory Authority (NEPRA) has notified upfront tariff for captive power plants (CPPs) running on residual fuel oil (RFO) for short-term utilisation of available generation capacity at Rs12.2497/kWh, a statement said on Friday. 

The determined tariff is applicable till December 2018 for the delivery of electricity by CPPs to power purchaser on take and pay basis. “Any captive power plant or small power producer can opt for the upfront tariff for sale of surplus power into the system and the minimum capacity to be offered will be 3.0 megawatts (MW),” the statement said. 

It said that after initiating suo moto proceedings for the determination of upfront tariff for short-term utilisation of the available generation capacity from CPPs running on RFO, NEPRA brought out the proposal for upfront tariff on take and pay basis at Rs11.9229 on April 29, 2017. 

It must be noted the National Electric Power Regulatory Authority had also invited stakeholders to become party to the proceedings by filing intervention request in the matter.  In this regard, Sitara Energy Limited (SEL) had come forward with a submission, which said the proposed upfront tariff did not appear to fully balance the interests of all the stakeholders including the power producers and thus required upward revision.   On the other hand, Gadoon Texile Mills (GTM) had put forward that the CPPs were those generation facilities which produced power for self-consumption and not for sale. However, by amendment in the regulations, the definition of CPPs was inserted into the law.

 The purpose of the amendment was to provide requirements for issuance of generation license to such generator. However, the law did not provide for determination of tariff by NEPRA in case of sale to either distribution company or bulk power consumer. 

The GTM management, in their statement, also added the National Electric Power Regulatory Authority’s attempt to proceed towards a competitive tariff regime would be undermined by this upfront tariff. 

The NEPRA in its determination had mentioned the RFO had been included in the Upfront Tariff Regulations as the designated fuel through an amendment. The authority had also noted that any captive power plant could sell surplus power and the rate would be determined and approved by the authority.