Nepra takes on Power Division for illegally making Pepco functional

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has come down heavily on the government for making Pakistan Electric Power Company (Pepco) functional on illegal grounds and its questionable perpetual meddling in affairs of power distribution companies (Discos) and generation companies (Gencos), arguing that Pepco is already dissolved.

To this effect, a notification showing the dissolution of Pepco has already been presented in the Peshawar High Court (PHC) by the authorities concerned. Once the entity is no more, then how it is still functional, Nepra said.

In a letter to Power Division dated June 6, 2018, of which a copy is available with The News, the electric power regulator has challenged the legal existence of Pepco and its direct oversight and meddling into the affairs of the functions of all Discos.

Pepco was incorporated in 1998 in pursuance of strategic plan for restructuring of the power sector to facilitate the transition process in Wapda power wing and effective corporatisation of new entities after unbundling of Wapda.

According to the letter, Pepco signed a memorandum of agreement with Wapda for a period of two years. Pepco was established for a specific mandate for two years and was to be dissolved after the expiry of the said period. However, after two years, Pepco continued its functioning.

“Later on the PHC in its sou motu action on unscheduled loadshedding in 2010 directed to dissolve Pepco and the cabinet decided in October 2011 to dissolve it and to this effect a notification was also produced before the PHC,” the letter said and added that the decision of the cabinet has not been implemented and Pepco to date continues to function and operates. Therefore, it is unclear in what legal authority and capacity (if any) Pepco is at present functioning.

More importantly, the entire energy sector has recently been reformed by way of Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Act, 2018. Under the said reforms, energy sector is to be liberated by way of de-regulation, market operations and expanded monitoring and enforcement by the regulator.

However, Pepco’s effective role in these reforms and trajectory of the energy sector remains unclear. NEPRA under this scenario has asked thePower Division to explain the PEPCO’s mandate and role in energy sector.

Since its inception, Pepco has assumed the role of overseeing and managing the government owned distribution and generation companies with the objective to improve their quality of service, reduce line losses and loadshedding, minimising tripping and theft, constructing new grids and such other related matters. That being the case, it is pertinent to mention that over the years, Discos’ performance key indicators have shown deterioration with respect to losses, interruptions, voltage function, recovery, safety and consumer completes. Same is the case with generation companies owned by the government. This aspect has been highlighted in Sate of Industry Reports and Performance Evaluation Report of Nepra from time to time.