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Nepra allows companies to sell electricity to bulk consumers

KARACHI: The National Electric Power Regulatory Authority (Nepra) on Friday gave its approval for the wheeling of electric power regulations.

As a result of this, power generation companies anywhere in Pakistan will be able to sell electricity to bulk power consumers (BPCs) of their choice.

According to a notification issued by Nepra, the step opens the market to small and medium-sized generators. At the same time, power distribution companies (DISCOs) will be required to maintain and improve their service quality to retain their customers while they would also financially benefit by receiving wheeling charges paid to them by the generation companies.

The consumers will be required to pay the cost of transporting electricity or wheeling, as it is called, for using the National Transmission and Despatch Company (NTDC) or DISCO system, in addition to the cost of generation, to be mutually agreed between the generator and the BPCs. With the involvement of private sector generators at transmission and distribution levels, not only the economy will get a positive boost, it is expected that the load demand on the system will be reduced considerably, enabling DISCOs to reduce load-shedding.

One of the key features of the regulations is the facilitation of dedicated transmission/distribution infrastructure. Under this concept where technical limitations do not allow a generation company, using DISCOs/transmission company’s network, it may construct a dedicated transmission or distribution system through its own expense to supply electric power to its authorised consumer, the notification says.

The regulations will go a long way in creating a competitive market that will benefit consumers and all the stakeholders in the power sector.

It was explained that DISCOs were liable to offer non-discriminatory open access to its distribution and inter-connection services to applicants. “The DISCO shall enter into a wheeling agreement with the applicant within 30 days of the acceptance of the application and a copy of the agreement shall be submitted to Nepra within seven days of execution of the agreement. The wheeler of power shall have the option of renewal after expiration of the original term of the agreement.

“A generation company [GENCO] may construct a dedicated distribution system from its own expense to supply electrical power to its authorised BPCs. Such a dedicated distribution system shall be handed over to a DISCO for ownership, maintenance and operation. However, the cost incurred by the generation company for setting up the distribution system will be recovered by the generation company through wheeling charges.

The DISCO shall not connect such dedicated distribution system to its other distribution network without the consent of GENCO. The DISCO shall acknowledge the receipt of the application within three days of the receipt of the application if the same is complete and contains the requisite information for processing the application: provided that any application which is incomplete or is not accompanied by the required information shall be returned within three days of filing thereof, identifying in writing the deficiencies in the application and the applicant shall be given a reasonable time to resubmit the application.

“With the new regulations, wheeling meters with technical specification specified by the DISCO will be installed at entry and exit points of DISCOs to measure the electrical power entering and exiting the DISCO network. Now many BPCs including real estate projects and industrial zones can easily get uninterrupted power supply from a GENCO that falls in the DISCO jurisdiction,” the notification concluded.

Benefits may not extend to Karachi

The mention of wheeling of electric power regulation was made some two months ago during a Nepra hearing in Karachi. At the time, representatives from the local industry, All Pakistan Textile Mill Association (Aptma), had raised the issue that the surplus electricity generated by them is bought from them by K-Electric at Rs3 per kilowatt is sold to the consumers at a lot more from around Rs10 to Rs14. They had requested being allowed to sell their surplus electricity to anyone else at their rate.

Now that Nepra has agreed that they may do so, they will only be able to sell the extra power they generate to their neighbour as for selling it to anyone else who may be far away, they need a distribution system like KE. And KE during that meeting had refused to let any GENCO use their transmission or distribution system for the purpose.

According to Mazhar Chaudhary, general-secretary of KESC Shareholders Association, Karachi would be deprived of the benefits of the wheeling approval by Nepra unless KE agrees to let GENCOs use their distribution system. “Because how else will you give your surplus power to others? Meanwhile, outside Karachi, all DISCOs seem to have no issues with allowing the use of their system by the GENCOs,” he said.

“As a consumer, I request Nepra to force KE to let the generations companies use their system, a service for which Nepra may fix the charges. Our stance is that when GENCOs everywhere in the country can sell power thanks to support from the DISCOs in their cities why should Karachi not benefit also? If KE cannot be forced, we propose another electric transmission and distribution company for Karachi that may end KE’s monopoly here. Something or the other will have to give GENCOs the right of way,” he said.