KAPCO says will contest NEPRA’s show cause notice

ISLAMABAD: Kot Addu Power Company (KAPCO) in a filing to the Pakistan Stock Exchange (PSX) on Tuesday conveyed that it would contest a show cause notice from the National Electric Power Regulatory Authority (NEPRA) regarding extension of the company’s power purchase agreement (PPA) for a period of 485 days.

KAPCO said it would contest the notice as per law by, inter alia, submitting a detailed reply within the stipulated period and would present its case before NEPRA and all relevant forums.

“There is no breach by the company of any rules and regulations under the NEPRA Act,” it stated.

NEPRA issued a show cause notice on July 25, 2022 to the company under section 27B of Regulatory of Generation, Transmission, and Distribution of Electric Power Act, 1997 (NEPRA Act) read with relevant rules and regulations alleging prima facie violation of Regulation 6 (2) of NEPRA Interim Power Procurement (Procedures and Standards) Regulations, 2005 in respect of the extension of the company’s Power Purchase Agreement (PPA) for a period of 485 days pursuant to the terms agreed between the company and the power purchaser for settlement of the liquidated damages dispute between the company and the purchaser by invoking the terms of the PPA under Other Force Majeure Events (OFME).

Through the show cause notice, NEPRA has sought a reply from the company, to be submitted not later than fifteen days of receipt of the show cause notice, as to why appropriate legal action might not be taken against the company under relevant rules and regulations of the NEPRA Act, inter alia, including the imposition of fine as prescribed.

According to KAPCO, it’s the company’s position that the extension of the PPA for 485 days is within the terms of the PPA and the company’s application for extension of the generation license was filed with NEPRA within the period stipulated in the applicable regulations. There was no breach by the company of any applicable regulations, it claimed.