ISLAMABAD: M/s Kot Addu Power Company Limited (KAPCO) has again approached the power regulator for early approval of provisional tariff as National Power Control Centre (NPCC), the System Operator is repeatedly emphasizing the requirement of KAPCO units to meet system demand.
In a letter to Registrar Nepra, Chief Executive KAPCO, Aftab Mahmood Butt, cited the letter of June 16, 2023 regarding notice of admission of petition on provisional tariff, adding that the power company has been contacted by System Operator and Power Division several times seeking an update on tariff specially the provisional tariff.
According to the power company, following the submission, NEPRA has admitted its tariff petition while decision on provisional tariff is still pending.
On technical side, the auto transformers at KAPCO have reached a maximum limit of 80 per cent. However, NPCC/RCC and MEPCO are managing the load with heavy management. The System Operator as well as Mepco are repeatedly emphasized the requirement of KAPCO’s power plant/generation facility during summer.
In May 2023, KAPCO threatened to invoke sovereign guarantee if its tariff is not determined by the power regulator saying that as the role of the Senate Committee on Energy is ‘advisory’ in nature it is not competent enough to issue directions.
The Nepra’s top brass has repeatedly been grilled by Senate Standing Committee on Power headed by Senator Saif Ullah Abro, who personally is against any further extension to KAPCO in Power Purchase Agreement (PPA). On several occasions, he threatened to recommend action against those officials who allowed the power company to deliver electricity beyond the PPA. CPPA-G has defended the decision to use KAPCO facilities for period beyond PPA expiry and agreed to resolve international litigation.
KAPCO had submitted an application for approval of reference generation tariff on October 24, 2022 at the time of expiry of its PPA of June 27, 1996 (as amended, from time to time). The application was returned ‘unactioned’ by Nepra on November 28, 2022 with a note to provide consent from the power purchaser. The company, in its letter of December 7, 2022 stated that there was no specific requirement of Consent from Power Purchaser under the NEPRA Act, Rules and/or Regulations.
The Nepra approved the Indicative Generation Capacity Expansion Plan (IGCEP 2022-2031) on February 1, 2023, which included the requirement of the Company’s power plant in the system till 2026 due to the strategic location and significance of the Power Plant.
Thereafter the Company submitted a revised application for tariff determination on March 8, 2023, which has not been formally admitted/progressed to-date despite a lapse of almost nine weeks. The System Operator (NPCC/NTDC) as well as Mepco have repeatedly emphasized the requirement of the Company’s power plant/generation facility during the upcoming summer as well as requirement of the company’s Switchyard Facility without any expiry.
M/s Kapco argues that in the absence of generation facility, the local areas network will have an energy crisis as there will be a high likelihood of overloading of Kapco auto transformers due to the high demand of electricity especially in the Mepco local area networks.
Further, at the special request of NPCC/NTDC, the company has been making its Switchyard Facility continuously available since October 24, 2022 to date in the greater national interest, without any compensation with an understanding/expectation for appropriate compensation for making this facility available.
According to power company, keeping in view the time required by Nepra for tariff determination, it has simultaneously also filed an application for the approval of provisional tariff by Nepra, adding that since summer season has commenced, the Company will be in a position to support the system only if a tariff is approved immediately or at least it is given a provisional tariff.
Furthermore, a reference was made by CPPA-G/Ministry of Energy with regards to certain reservations raised by Senate Committee on Energy vi-a-vis technical/strategic requirement etc. of the company’s power plant.
The power company has claimed that after detailed review and revalidation of facts, Ministry of Energy (Power Division) has directed to initiate the negotiations of Power Purchase Agreement with Kapco for retention of its generation as per NTDC/MEPCO requirements till 2026.
