Ministry seeks modification in Nepra Regulation

ISLAMABAD: The Ministry of Energy with the consultation of stakeholders has suggested recommendations to the National Electric Power Regulatory Authority (Nepra) to bring modifications in existing ‘Nepra’s Wheeling of Electric Power Regulation 2016’, to make headway in opening the market and moving towards bilateral trade of electricity between buyers and sellers independently.

It is worth mentioning that on 13 February 2016, Nepra had notified these regulations, aimed at opening up the market for electricity sale and purchase without intermediaries i.e. Central Power Purchasing Agency (CPPA). Since its notification, not much headway was made because of certain observations of key stakeholders regarding the regulations, a letter of the ministry written to Nepra says. After holding meeting with stakeholders and taking opinions from experts, the power division decided that for making electricity sale and purchase privately, the existing regulations were not enough and suggested some recommendations to the power regulator. The power division on March 16 had written a letter to the power regulator in which the ministry had mentioned these obstacles and observations in detail.

In its recommendations, the ministry had requested the Nepra that these regulations should be limited to wheeling on dedicated feeders (132kv and 11kv) for loads more than one megawatts. The wheeling should be limited to the same distribution company (DISCO) where seller and buyer are located. Besides, it suggested that for the time being, no inter DISCOs trade be allowed. It has also been recommended that any interested consumers utilizing these regulations should be allowed to retain power utility connection for which relevant charges will be paid by them. According to the earlier regulations, there was no provision of holding such connection.

It further said that in case of non-utilization of energy by the buyer, banked energy should be allowed for a month after that the seller should either sell this energy to another buyer (other than DISCO) or shut down the plant. It will not be mandatory for the DISCOs to buy this energy.

The ministry further suggested that in case the bulk consumer is taken out from the consumer base of Distribution Company, the displaced capacity charge should be added to the wheeling charges for a period of one year or new tariffdetermination whichever is later. The “wheeling” or “wheeling services” means the use of the distribution system of the DISCO for the transport of electric power. The regulations of wheeling will go a long way in creating a competitive market which will benefit the consumers and all the stake holders in the Power Sector of Pakistan.