KE granted provisional license extension

Nepra grants six-month provisional extension subject to conditions

ISLAMABAD:

In a significant move, the National Electric Power Regulatory Authority (Nepra) has granted a six-month extension to K-Electric Limited (KE) for its distribution license on a provisional basis. This step has been taken to guarantee uninterrupted power supply to Karachi, one of Pakistan’s largest and most populous cities.

KE submitted an application for the renewal/extension of its Distribution License on December 1, 2022. The power regulator had previously granted KE the exclusive Distribution License, empowering the utility to provide distribution services, sell electric power, implement schemes, and engage in incidental activities in the Service and Concessional Territories on a non-discriminatory basis. The original term of the license was set for twenty years, slated to expire on July 20, 2023.

Recognising the importance of timely action, Nepra had already initiated the necessary regulatory process for the renewal of the Distribution License. After a regulatory meeting on July 17, 2023, Nepra decided in principle to conduct a public hearing on the matter. However, understanding that the complete regulatory process could from three to six months, the authority found it prudent to grant interim relief to KE, allowing them to continue their operations uninterrupted.

While the application for the renewal of KE’s Distribution License is currently under process, Nepra emphasised that the provisional extension was granted in the best interest of the public to ensure an uninterrupted power supply to consumers in the Service and Concessional Territories of KEL. The provisional extension will be effective for six months from the original expiry date of July 20, 2023, or until the final determination of the authority, whichever occurs earlier. However, this provisional extension will be subject to certain conditions.

As part of the conditions, KE will no longer enjoy exclusivity for the provision of Distribution and/or Electric Power Supply services. Nepra reserves the right to issue other licenses in KE’s Service/Concessional Territories. The amended NEPRA Act’s Section 21 prohibits any exclusivity clauses. Moreover, KE will be required to allow Bulk Power Consumers (BPCs) to obtain supply from any generation company, ensuring a more competitive and diverse power supply landscape. The company will also be obligated to allow the use of its system by any third party for supplying/wheeling of electric power.

Published in The Express Tribune, July 21^st, 2023.

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