Policy reforms in power sector on cards

NEPRA chief says high-power committee to probe over-billing

LAHORE:

National Electric Power Regulatory Authority (Nepra) Chairman Waseem Mukhtar on Saturday said the government is in the process of implementing a competitive trading bilateral contract market (CTBCM) that has to ultimately generate competition among market players to the benefit of consumers in terms of both the quality of service and pricing.

The CTBCM would allow the suppliers of electricity and consumers the freedom to enter into direct contracts with one another as the market forces play out.

“The consumers will be the ultimate beneficiary of the move as they would be able to purchase electricity of their choice from the power distribution companies,” the Nepra chief said while talking the media during the energy conference at the expo centre in Lahore.

The Nepra chairman maintained that currently the power generation capacity was 48,000 megawatts. He said the National Transmission Dispatch Company (NTDC) procures electricity after seeing the production cost of any plant.

At present, the electricity transactions are done under a single-buyer model whereby the Central Power Purchase Authority Guarantee Limited (CPPA-G), an entity that was created out of the National Transmission and Dispatch Company (NTDC), buys power from all the producers whether government-owned generation companies (GENCOs) or the IPPs as an agent of and on behalf of the power distribution companies (DISCOS).

The CPPA-G also plays the role of system operator whereby it matches supply with the demand of various DISCOs. It also acts as the market operator and in this role it carries out the billing and settlement functions. The long-term demand forecasting function lies with the NTDC at a macro-level while the DISCOS are responsible for assessing the short-term demand for their respective regions.

He called for curbing electricity theft in order to control the rising power tariff, stressing that action will be taken against distribution companies (DISCOs) staff involved in power pilferage, and suggested the introduction of power sector for the purpose.

Read also: NEPRA ups tariff by Rs1.46 due to July FCA

“Tough decisions will have to be taken in order to provide cheap electricity to people. Citizens will have to support the government on these measures,” he said.

Mukhtar stated that they were introducing a free market in the power sector, and noted that the initiative would enable the consumers to buy electricity from the company they desired. He observed that the concept of free market was prevalent in the world, stressing that “we will have to change our habits”.

The exclusive distribution licences of all the public sector DISCOs of formerly Wapda and KE have already expired and now are operating on temporary extensions or are on the verge of expiry. Most of the Discos still want their exclusivity to remain intact while some others like KE are willing to give up exclusive jurisdiction for power supply.

The Nepra chairman clarified that the decision to raise power tariff was taken after a public hearing on the power hike petition. He maintained that power regulator endeavored to put least burden on the people.

He also said that a committee has been formed to look into the issue of over-billing.

The committee would check the performance of all DISCOs in light of the recent reports of discrepancies in their bills. The committee will submit its detailed report to Nepra within one month.