Pakistan Regulation Overview

8/13/2019 Pakistan Regulation Overview

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NEPRA

Functions and Activities

Briefin

toUSEA


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ESTABLISHMENT OF NEPRA

In order to reform the Pakistan power sector a strategic plan forrestructuring, reforming and privatization of WAPDA was developed by

.

Council of Common Interests (CCI) in 1993.The strategic plan recommended corporatisation and privatization of

n o separa e enera on an s r u on ompan es.

The Prime Minister directed the implementation of the strategic plan for

WAPDA as approved by the CCI through P.Ms directive dated 24-10-1998. The directive of the P.M included the following.

,sector, which meets the requirements of the consumers in thecheapest and the most efficient manner. Ensure that the

vision.


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ESTABLISHMENT OF NEPRA

The strategic Plan included the creation of an Independent

regulatory Authority to provide a level playing field to all the stake

holders and to assure prospective investors that an independent

agency would be objectively deciding on regulatory matters of power

NEPRA was established by the Government of Pakistan in January.

NEPRA was formally notified through promulgation of the

Regulation of generation, Transmission and Distribution of ElectricPower, as Act No. XL of 1997 on 13th December 1997.


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Constitution of the Authority

The Authority comprises of a Chairman,appointed by the Federal Government, and fourmem ers a so appo n e y e e eraGovernment on the recommendations of the

.

The Chairman and the members are appointed

similar term provided that a member other than

already attained the age of sixty five years.(Section 3 of the NEPRA Act)

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Organogram of NEPRA

Chairman

Member

Standards

Member

Licensing

Member

Tariff

Member

Privatization

Tariff Consumer

cens ngWing & ITWing

Affairs, Coord& Legal

an ar sWing r va zaTion/Wing m n s ration & HReg s rar

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Powers and functions of NEPRA under the Act

a) Grant licenses to Generation, Transmission or Distribution

services.

, , .

c) Prescribe and enforce performance and investment standards.

.

e) Ensure continuous, efficient and affordable supply of electric

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Act/Rules/Procedures

(Framed by NEPRA)

,Power Act (XL of 1997). Enacted by Parliament in December 1997.

Tariff Standards and Procedure Rules, 1998.

, ,

Licensing (Distribution) Rules, 1999. Licensing (Generation) Rules, 2000.

Fees and Fines Rules, 2002.

Consumer Eligibility Criteria (Regulations), 2003.

Resolution of Dis utes between IPPs & other Licensees 2003

Performance Standards Distribution Rules 2005

Performance Standards Transmission Rules 2005

2005

Grid Code, Distribution code 2005

8

onsumer erv ce anua


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Players in the Power Sector

,Privatization

Commission

Companies

Regulator,

Chambers of

Commerce &

Industry.

Public Bodies,

Representatives,

9

IFIs-

Area residents


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Present Status

a) Formation of Rules, Regulations, Procedures

b) Grant Licenses

c) Tariff-----MYT( KESC, FESCO), IPPs , GENCOs,Wind.

p ront tar .----- or erma n s

e) Standards ---- Monitoring of Standards. -

g) Tribunals

.

SAFIR, SARI, USAID, World Bank, USEA,

PURC, NARUC, Of em, TERI/CERC,

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South Africa, China


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PAKISTAN Power System

MARDANWARSAK

TARBELA(240)

(3408)GAZI BAROTHA

BANNU

DAUDKHEL

NEW RAWAT

I.S.P.R

MANGLA

GAKHAR

SAHOWALA

SABA

(1000)CHEP(184)

CHASNUPPGATTI

BURHAN

(132)

. .

RAVI

JAPAN

KEL

N.ABAD

YOUSAF WALA

VEHARI

KAPCO

ROUSCH

AES

(132)

(131)

(355)

(1348)

(695)(140)

BUND RD:

HCPC

SIBIQUETTA

LAHORE

K.LAKHPAT

K.ADDU S:ROAD

MULTAN

SEPCOL (117)

FKPC 157UCH

N.G.P.S

M.GARH

GUDDU

LIBERTY

500 kV Grid Station

500/220 kV Grid Station

(195)(1350)(548)

(1655)

(229)

GUDDU

DADU

HALA RD:

LAKHRA

KOTRI

HUBCO

220 kV Grid Station

Hydel Power Station

Thermal Power Station

IPPs

Power Station 500 kV

(150)

(850)

(174)(1200)

TAPALG.AHMAD

11

KDA-33(KESC)



500 kV T/LINE

220 kV T/LINE


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Overall Country System Installed Capacity and Units generatedOverall Country System Installed Capacity and Units generated

(FY(FY 20052005--06)06)

(KESC) Thermal

1756 (KESC)

(KESC)

Thermal

9066

11%

Installed apacity 19450 MW enera on

(Wapda) Hydro

Electric 6499

34%

Available from IPPs

& Nuclear462

2%

9% Available from IPPs

& Nuclear

1876

2%

(Wapda)

Hydro Electric30862

34%

(WAPDA) Availabe

from IPPs &

Nuclear

5833

30%

(Wapda)

Available from IPPs

& Nuclear

31090

(Wapda) Thermal

4900

25%

(Wapda)

Thermal

22508

26%

27%

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HYDEL THERMAL MIX

OilHydel

6499 MW

(34%)

(34%)

Nuclear

Total 19450 MW

452 MW(2%)

Coal

150 MWGas

13

(1%)5815 MW

(30%)


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W PD s RESTRUCTURING

N T D CT D C 1 )

WAPDA HYDEL

DISCOs

POWER WING

GENCOs( 9 )( 4 )

TRANSMISSIONGENERATION DISTRIBUTION

14

Thermal Power

Stations

Grid Station/Trans. Lines

Operation & MaintenanceDistribution Companies


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Generation Business in Pakistan

a) Ex WAPDA GENCOS--- 4 Nos All Licensed

b) WAPDA Hydel ----- 1 Comprehensive License

----.

d) IPPs Pursuant to 2002 P.P----- 5 Nos all Licensed (COD not yet)e) KESC generation ------ Licensed

---------- os a cense

g) Distributed generation---------- 7 Nos all Licensed

h) Wind Energy --------------------4Nos (3 Licensed)

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Transmission Business in Pakistan

a) NTDC-------

a) KESCTransmission-----

Process

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a) DISCOs-------- 8 Nos all Licensed with Individual tariffs.

s r u on us ness n a s an

a) PPP

b) Distribution Margin

c) Average Sale Rate

b) KESC----------KESC Distribution License

a) PPP--- KESC own Generation, NTDC, IPPs

b) Distribution Margin

c verage a e ate

d) Consumer End Tariff

c) SPPs-----------34 Nos Out of this only 9 Nos qualify for the grant of a distribution license.

a Licence ranted.

b) Consumer End Tariffs notified

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Distribution Business in Pakistana BPC operat ve at t e t me o D stt L ce------

All Such cases being identified and notices

bein issued. 1st hearin of its kind held in

May 2007 for grant of distribution License toBahria Town Housing Colony (an Inset H/S

.

a) Separate distribution License Prepared

b) Will have a separate tariffc e requ re to meet a tan ar s

Codes

b) Policy on the Eligibility Criteria for such

INSET entities being developed.a) This will include the Principle of

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applications.


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Post Privatized DISCOs/KESC

WAPDA Carporatized into EIGHT Discos (Distribution Companies) One Disco (FESCO) offered for privatization

Individual Tariffs for each Disco notified in 2007 after three years of delay

Can now plan their own development plans and sign loan agreements. Have the power to sing bi-lateral with any GENCO for meeting its excess capacity

KESC

Privatized in 2005 (taken over by the new management) KESC Distribution se arate licensed

Has its own Consumer end tariff

The total tariff including Generation plus Transmission and Distribution is a MultiYear Tariff for a control period of Seven Years.

Control Period 7 years

As per the mechanism KESC DISCO break even after three years with losses downfrom 40% to 25%

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Privatized KESC will invest around US$ 500M in KESC Distribution only

Any un notified amount above Consumer end tariff will be paid by the Govt assubsidy


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Consumer Class Wise Rates Cents/kWh (Previous )Consumer Class Wise Rates Cents/kWh (Previous )

1-100 Units Residential

Up to 50 Units (Residential)KESC

Above 1000 Units (Residential)

301-1000 Units (Residential)

101-300 Units (Residential)

WAPDA

Bulk

Industrial

Commercial

-

Average Sale Rate

KESC &WAPDA

KESC 7 7 8 11 9 13 13 10 6 4 2

Average

Sale Rate

KESC

&WAPDA

Agricultral

Tubew ellsBulk Industrial Commercial

Above 1000

Units

(Residential)

301-1000

Units

(Residential)

101-300

Units

(Residential)

1-100 Units

(Residential)

Up to 50

Units

(Residential)

21

WAPDA 7 7 7 10 9 12 12 10 6 4 2


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ELECTRICITY TARIFF COMPARISON

16

12

10

Residential

6Industrial

2

4

0 Indones ia FRANCE INDIA Pak is tan Turk ey United States U.K


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LOSSES DISCOs/KESC

Total Consumers Served 17.5MillionLosses

2005

Losses 2000--%S No

10.49.5IESCO2

10.210.5LESCO4

1112.7GEPCO3

2034MEPCO6

12.813.7FESCO5

15.322QESCO8

39.539HESCO7

23

3436KESC9


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Year Wise Progress

(TARIFF)

07----041998

TotalOthersDeterm nat on(WAPDA/KESC/GENCOS/NTDC/DISCO s)

Year

030102200004----041999

0701062002

13----132001

3303292004

0801092003

0501252006

2419626170Total


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Year Wise Progress

TOTALWAPD

A

HYDEL

IPPs/

Wind

CHAS

NUPP/

kannu

GENCOs

& KESC

NTDCDISCOsSPP

s

Year

--------------------------------2000

17------------040107052002

--------------------

180104----------------132004

----------------

07072006-------------

25

442007

7901300205010931Total


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Safeguarding interests of Consumers

Unrestricted self Generation & Bilateral Contracts.

Affordable tariff for all categories.

Life line consumers

Redressal of Complaints:i) Utility services obligation

iii) Consumer Affair Division at NEPRA attended/rectified over

1800 Nos complaints since inception.iv) Court of Law

Representation through Consumer/human rights

Education/Information throu h media/website.

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Complaints Handling

Complaints redressed through NEPRA ConsumerComplaints AddressedComplaintsYear

Affairs Division under Complaint Redressal

mechanism/ POI

through Provincial

Offices of

Inspection/DISCOs

Recieved

65- Attock Cement Vs KESC1722372003

361511872002

116- Iftekhar Ahmed Vs IESCO, PWD H/s

Vs IESCO, D.s Textile Mills Vs LESCO c

2383542004

217- PACE Lahore, Civilian Coop H/s85110982005

193- Tayyab textile mills Vs FESCO, HDIP3555482006

,

KESC Vs NTDC

95-2413572007

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Inspection and are functioning pursuant to Sec 38 of the NEPRA Act

C ti P tt (2005 06)


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Consumption Pattern (2005-06)Units billed 67603 GWh Losses 24.9%

Total Number of Consumers including KESC-17.24 M

% of% ofTotalKESC NosEx-WAPDACatagory

45.4%83%14.09M1.3512.74Domestic

Consumptio

n

ConsumerMillionNos Million

7%15%2.82M.402.42Commercial

29.3%1.5%0.23M0.020.21Industrial

17.3%.5%0.005M0.0010.004Bulk&

others

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100%17.24M1.82M15.42MTotal


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Projected ShortagesElectricity Growth rate assumed to be 9%

Surplus/deficitPeak

demand

Installed

Capacity

Year

30001400019226/160002005

8001520019226/160002006

(2100)1950019500+2009

2960000+2030


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Pricing Mechanism

a) Generation---- New IPPs--- Cost Plus return on Equity, Tariff Comprises of CPP&EPP with Provision of adjustments for

currency fluctuations and inflation.

x st ng s governe un er . . ot eterm ne y .

b) Transmission--- Cost plus debt service plus Return on Equity.( Only transmission chargefor transporting Electricity) Cost CPP Plus EPP PLUS T. Char e transferred to Discos assed on the

prescribed formula.

Charging of CPP-------- on the basis of Max demand recorded by a DSICO

during the montharg ng o --------- as per pr ce per un e vere o e as e ra e

c) Discos Tariff --- Distribution Margin----cost plus return on assets (weighted average cost

of capital ).

Consumer end tariff is determined on the basis of CPP,EPP charged to a DISCO plus

distribution margin with the provision of Cross subsidization within the variousconsumer classes.

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Future Potential on indigenous resources

Expected PotentialFuel/techNo

y e

20000MWCoal2

enewa e

700MWMini/Micro h del5

uc ear

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Pakistan Regulation Overview

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