NEPRA slaps Rs25 million fine on K-Electric

Blames power utility for failing to restore system, comply with standards after January '23 breakdown

The National Electric Power Regulatory Authority has imposed a fine of Rs25 million on K-Electric for failing to perform system restoration duties and comply with grid operation standards following a nationwide power breakdown on January 23, 2023.

In an order issued on October 8, Nepra concluded that KE violated key provisions of the Nerpa Act, the Generation Licensing Rules 2000 and clauses of the Grid Code related to power restoration and system reliability.

It said the company’s inability to maintain “adequate black start readiness” and conduct required mock tests directly contributed to extended outages across Karachi after the collapse of the national grid.

The 2023 breakdown, which began at 7:34 am on January 23, plunged the entire country into darkness and it took nearly 20 hours to fully restore supplies.

Nepra’s inquiry found that KE, which was synchronised with the National Transmission and Despatch Company (NTDC) network, was drawing 708 megawatts from the national grid while generating another 538 MW independently.

When NTDC’s connection tripped, the KE system failed to sustain itself, triggering cascading shutdowns across its generation fleet.

According to the authority’s findings, tripping at key power facilities including the Bin Qasim Power Station (BQPS)-III, Tapal and SITE plants – all equipped with black start capability – lacked credible technical justification. Despite multiple restart attempts, most black start units failed to sustain operations in isolation, severely delaying Karachi’s power restoration.

Nepra stated that the pattern of repeated tripping reflected inadequate mock drills and poor contingency preparedness for blackout scenarios.

The regulator said KE breached Section 14B(4) of the Nepra Act, Rule 10(6) of the Generation Licensing Rules and clauses OC 8.1.1, 8.1.4, 8.2.1, 8.2.2 and 8.2.3 of the Grid Code. These provisions obligate power producers to maintain readiness for total or partial shutdowns, ensure timely power restoration and coordinate with the national grid operator for safe system recovery.

In its defence, KE attributed the blackout to a disturbance in NTDC’s 500-kilovolt (kV) transmission network, which caused cascading failure in its own system. The utility argued that because it operates within an interconnected grid, power interruptions were inevitable in the event of national grid disruptions.

It also claimed that the event occurred during a low-demand winter period, when system inertia was limited, amplifying the disturbance. KE contended that its plants had operational black start systems and said Nepra’s proceedings were “time-barred” under fine regulations.

However, Nepra dismissed these explanations, stating that as a vertically integrated utility, KE was responsible for maintaining system resilience regardless of national grid fluctuations.

The regulator noted that repeated failures of black start systems – despite earlier drills – revealed major operational and technical shortcomings. Nepra also rejected the time-barred argument, ruling that its regulatory timeline was “directory in nature” and that action had been initiated within a valid period.

The authority’s decision emphasised that KE’s inability to independently restore power demonstrated “systemic weaknesses in contingency planning, maintenance and black start testing.” It concluded that the company “failed to perform its operations and discharge its responsibilities in accordance with applicable laws, rules and Grid Code.”

Nepra ordered KE to pay the Rs25 million fine within 15 days and submit payment proof to the regulator’s registrar. The order warned that failure to comply would result in recovery of dues as arrears under Section 41 of the Nepra Act.

The decision was signed by Nepra Chairman Waseem Mukhtar and members Rafique Ahmed Shaikh (Technical), Amina Ahmed (Law) and Engineer Maqsood Anwar Khan (Development).

Responding to the development, a KE spokesperson said the company found the penalty “surprising,” adding that the January 2023 blackout “was caused by a disturbance in the NTDC system.” The spokesperson said KE was reviewing Nepra’s detailed decision and “will determine the future course of action accordingly.”