Transcript Role of NEPRA

Second Workshop on Power Sector Reform –
Role of NEPRA
Lahore: November 12, 2010
1
FUNCTIONS OF NEPRA
As per Section 7(1) and (2) of NEPRA Act, the Authority
shall be exclusively responsible for:
 Grant Licenses for Generation, Transmission &
Distribution of electric power;
 Prescribe procedure and standards for investment
programs by Generation, Transmission and Distribution
Companies;



Prescribe and enforce performance standards for
Generation, Transmission and Distribution Companies;
Establish a uniform system of accounts by Generation,
Transmission and Distribution Companies;
Prescribe fee including fees for grant of licenses and
renewal thereof;
2
FUNCTIONS OF NEPRA
Contd…

Prescribe fines for contravention of the provisions of this
Act;

Perform any other function which is incidental or
consequential to any of the aforesaid function.
As per Section 7(3) of NEPRA Act, the Authority shall:
 Determine tariff, rates, charges and other terms and
conditions for supply of electric power services by the
Generation, Transmission and Distribution Companies
and recommend to the Federal Government for
notification;
3
REGULATORY INSTRUMENTS
Regulation of Generation, Transmission and Distribution of
Electric Power Act (XL of 1997): to regulate generation,
transmission and distribution of electric power.
Application Modification Procedure Regulations, 1999: to
standardize the manner for submitting applications and filing
petitions to NEPRA.
Licensing Generation Rules, 2000: to streamline the process
for becoming a licensee under NEPRA Act.
Tariff Standards Procedure Rules, 1998 & Fees Pertaining
to Tariff Standards & Procedure Regulations, 2002: to
highlight the procedure of tariff determination and standards to
be adopted.
4
REGULATORY INSTRUMENTS
Contd…
National Electric Power Regulatory Authority Licensing
(Distribution) Rules, 1999 & Eligibility Criteria for Consumers of
(Distribution) Companies, 2003: to regulate the process of acquiring
licenses by distribution companies.
Interim Power Procurement (Procedures and Standards)
Regulation, 2005: to streamline the manner for acquiring permission
for sale of power to transmission and distribution companies.
Performance Standards (Distribution) Rules, 2005: to provide
standards of performance for distribution companies.
Performance Standards (Transmission) Rules, 2005: to provide
the standards of Performance for transmission companies.
NEPRA Uniform System of Accounts Rules, 2009.
5
TARIFF DETERMINATION
NEPRA determines tariffs for the three sectors namely
Generation, Transmission and Distribution:

Under Section 7 (3) (a) of the Regulation of Generation,
Transmission and Distribution of Electric Power Act (XL
of 1997) NEPRA is exclusively responsible to determine
tariff, rates, charges and other terms and conditions for
supply of electric power services by the Generation,
Transmission and Distribution Companies and
recommend to the Federal Government for notification.

Discharging its responsibilities under Act, NEPRA has to
determine/approve Tariff in respect of Generation,
Transmission and Distribution Companies.
6
TARIFF DETERMINATION
Contd…
Currently NEPRA’s determinations include:

Quarterly determination in respect of 9 Distribution Companies
including KESC.

Monthly Fuel Price Adjustment in respect of 9 Distribution
Companies including KESC.
Generation Tariff determinations in respect of Public Sector
Generation Companies, IPPs, WAPDA Hydel etc.



Tariff determination in respect of NTDC.
Fortnightly Fuel Price Adjustments in respect of GENCOs,
IPPs etc.
 Adjustment of determined generation tariff of IPP at COD.
During 2009-10, the Authority made 311 determinations/adjustment
regarding tariff of generation and distribution companies. These
included 41 tariff determinations, 3 decisions on review motions and
267 tariff adjustments in respect of Fuel Price, CPI, COD, tax and
quarterly indexation.
7
DISCOs’ 1ST QUARTER TARIFF DETERMINATIONS 2010-11

All statutory requirements have been complete for all
DISCOs and KESC.

Forms the basis for the remaining quarters of the year as
Key parameters are required to be set

Policy questions have to be addressed
-

Tariff rationalization, Subsidy and cross subsidy
Experts appointed by the USAID were specifically tasked
by NEPRA to provide inputs on the Cost of Service Study
for different DISCOs.
8
DISCOs’ 1ST QUARTER TARIFF DETERMINATIONS

Review of the performance of DISCOs during 2009-10

Determination of 4th Quarter, 2009-10
FESCO
8 September, 2010
QESCO
8 September, 2010
GEPCO
8 September, 2010
HESCO
9 September, 2010
IESCO
9 September, 2010
LESCO
8 September, 2010
MEPCO
18 October, 2010
PESCO
20 October, 2010
9
DISCOs’ 1ST QUARTER TARIFF DETERMINATIONContd…
 Determinations for all DISCOs and KESC for Q1 2010-11
will be made during November and early December, 2010.
 Relevance of Ordinance # XIV dated 20 April, 2010 and
tariff determination for the remaining period of 2010-11
 Difficulties in quarterly determinations -- NEPRA’s views
 All participatory and transparency requirements under the
NEPRA laws also need to be satisfied for quarterly
determinations. Court binds to conduct hearing for decision
on Monthly adjustments.
10
STATUS OF NTDC TARIFF





NTDC Tariff was determined in 2007.
NTDC filed tariff petition subsequent to a series of NEPRA
letters. NTDC requested for extensions in time on different
pretexts.
Hearing was held in October 2010, however it was
adjourned due to information requirement from NTDC.
Major issues concern about losses in the transmission
system.
Determination expected by February, 2011.
11
STATUS OF GENCOs’ TARIFF
Subsequent to the directions of the Planning Commission:
•
GENCO-I (JPCL): Multiyear tariff, Control Period up to 2014.
•
GENCO-II (CPGCL):
Letter about the need for a multiyear tariff up to 2014 along
with direction to file Tariff Petition sent on 18 August, 2010.
Reminder to the above letter sent on 17 September, 2010.
•
•
•
•
Response by CPGCL on 1 October, 2010 requesting for
extension in time.
Authority granted extension till 20 October and informed that
on failure, suo-moto proceedings will be initiated.
CPGCL requested for further extension on 20 October,
2010.
12
STATUS OF GENCOs’ TARIFF





Contd…
GENCO-III (NPGCL):
Letter about the need for a multiyear tariff up to 2014
along with direction to file Tariff Petition sent on 18 August,
2010.
Reminder to the above letter sent on 17 September, 2010.
Response by NPGCL on 1 October, 2010 requesting for
extension in time.
Authority granted extension till 20 October and informed
that on failure, suo-moto proceedings will be initiated
CPGCL requested for further extension on 18 October,
2010.
13
STATUS OF GENCOs’ TARIFF






Contd…
GENCO-IV (LPGCL):
Letter about the need for a multiyear tariff up to 2014
along with direction to file Tariff Petition sent on 18 August,
2010.
Reminder to the above letter sent on 17 September, 2010
Response by LPGCL on 22 September, 2010 requesting
for extension in time.
Authority granted extension till 20 October and informed
that on failure, suo-moto proceedings will be initiated
LPGCL Filed on 18 October, 2010.
After completion of information requirements (Board
Resolution) received in November It will be placed for
admission shortly.
14
STATUS OF GENCOs’ TARIFF
Contd…

Heat Rate tests also needed to work out tariffs under the
present state of plant and equipment.

Capacity tests are critical.

GENCOs’ unwilling response is not helpful, possibility of
unrealistic tariffs being passed to the consumers. The
Planning Commission may take notice.
15
MONITORING OF POWER SECTOR
NEPRA has established a division headed by a Director
General and supported by Director for the monitoring of the
performance of the sector.
Monitoring of the sector is being conducted in the following
modes:

Monitoring pursuant to Performance Standards

Monitoring pursuant to Authority Determinations

Monitoring on need
Monitoring Activities:

Monitoring of Generation Companies (IPPs) at COD

Monitoring of Distribution Companies

Monitoring of Generation Companies including
Public Sector GENCOs
16
MONITORING AT COD
A team headed by Director (Thermal) Inspects the IPPs at the time of
COD for verification of their technical, financial and legal aspects.
FUNCTIONS OF MONITORING TEAM:
 To observe the tests like RRT, IDC HRT etc. carried out at the time of
COD as per the guidelines provided in the test Protocols, Power
Purchase Agreement and International Engineering Codes.
 To carryout physical verification of existence and reasonableness of
various claims allowed in the Tariff determination such as, Generation
facility equipments, electro-mechanical and civil works construction
etc.
 List of IPPs visited:
Attock Gen Limited
165 MW
24 April, 2009
Atlas Power Limited
224 MW
15 December, 2009
Engro Energy Limited
226 MW
23 March, 2010
Saif Power Limited
231 MW
23 April, 2010
Orient Power Limited
225 MW
20 May, 2010
Nishat Power Limited
202 MW
4 June, 2010
17
Nishat Chunian Limited
202 MW
16 July, 2010
SPECIAL PERFORMANCE AUDITS

Special Audit have been commissioned by NEPRA for
MEPCO.

NEPRA Team lead by Director General carried out
evaluation of HESCO losses.

NEPRA Team lead by Director General carried out inquiry
about KESC operations during black out of the system.

Financial Audits have been carried out to verify CPPA
purchases from IPPs and GENCOs.

Evaluation of calorific values of the Fuel.
18
MONITORING THROUGH PERFORMANCE STANDARDS
In exercise of the powers conferred by Section 46 of the
Regulation of Generation, Transmission and Distribution of
electric Power Act, 1997 read with Section 34 thereof,
National Electric Power Regulatory Authority, with the
approval of the Federal Government has prescribed and
notified:



Performance Standards (Distribution) Rules, 2005 notified
in 11th January, 2005.
Performance Standards (Transmission) Rules, 2005
notified on 15th November, 2005.
Performance Standards (Generation) Rules, 2009 notified
on 17th November, 2009.
19
MONITORING OF DISTRIBUTION COMPANIES
•
•
•
Performance Standards are designed to encourage safe, efficient and
reliable service, including standards for service characteristics such as
voltage and stability as well as scheduled and unscheduled outages.
Under Performance Standards (Distribution) Rules, 2005 distribution
companies are required to maintain a prescribed overall systems in term of
electric reliability, voltage and frequency of power supply. The standards
include:
―
Power supply restoration time (Hrs).
―
Annual number and duration of individual consumer power supply
interruptions.
―
Voltage range of + 5% and frequency range + 1% from nominal
voltage and frequency of power supply at the consumer supply
terminals.
―
Time limits for new connections categorized based on size of the
load and voltage level.
―
Electric safety standards.
―
Non-discriminatory principles and priorities of load shedding to be
followed by the distribution companies.
Rules are enforced through Licenses under which periodic reporting is
required by Licensees.
20
MONITORING OF DISTRIBUTION COMPANIES

NEPRA has held various meetings with DISCOs to educate
them about APRs.

Considering DISCOs weak understanding about APRs, the
Standards Division has held a special campaign of
workshops at each DISCO Head Quarter to closely interact
with them for their enhanced understanding about
implementation of Performance Standards (Distribution)
Rules, 2005. The team comprising of DG (Stds.) and other
professionals has visited all DISCO Head Quarters and
delivered presentations to educate their engineers up to
SDO level.
21
MONITORING OF GENERATION COMPANIES
• The Performance Standards (Generation) Rules, 2009 have been formulated
with to ensure that the Electric Generation Facilities and Power Plants are
operated efficiently, and to ensure Electrical Service Reliability and
Adequacy for the Transmission and Distribution Service Providers within
Prescribed Parameters
• Reporting requirements are:1. For Overall Standards with regard to Quality of Supply, the Licensee
shall supply compliance report every year to the Authority, before 31st of
October, for the preceding year
2. Reports required for the Key Performance Indicators (KPI) shall be
submitted on a quarterly basis.
3. The Generation companies have been asked to submit reports regarding
compliance with PSGR.
4. The received APRs are being processed by Standard Division for their
presentation to the Authority.
22
MONITORING OF KEY PERFORMANCE
INDICATORS OF GENCOs

Director (Thermal) of NEPRA monitors the availability of
power plants.

Data is obtained from NTDC and KESC to ascertain the
daily load position of their systems.

Comprehensive technical data is obtained on monthly
and annual basis on E.form to monitor the efficiency of
the power plants.
23
MONITORING OF TRANSMISSION COMPANIES


As per Performance Standards (Transmission) Rules, 2005, the Licensee is
required to submit to the Authority every year, before the 31st of March of the
succeeding year, an Annual Performance Report (APR) containing all
relevant Information with respect to Compliance with these Rules during the
Year including a Statement of Comparison with the Last APR submitted
The Standards Division is responsible to obtain and analyse the APRs from
Transmission companies.
APR of NTDC for YEAR 2009

Have been analyzed and

Meeting with Senior Officers of NTDC held on 4th March, 2010.

Requirement of System Expansion as per Grid Code PC 4.6, was also
discussed during the meeting.
APR of KESC for YEAR 2009

Senior Officers of KESC held meeting on 3rd February, 2010.

Purpose was to guide KESC for proper compliance of PSTR and
understanding Proformas.

KESC agreed to provide the APR as per PSTR after the issuance of License.
24
THANK YOU
25
CONSUMER INTERESTS

NEPRA pursuant to Section 39 of the Act, deals with
complaints by any interested person against a licensee for
violation of its rules, regulations and orders.

Pursuant to Section 21(2) (b) of the Act, NEPRA has issued
Regulations for Eligibility Criteria for Consumers for non
discriminatory provision of distribution services and sale of
electric power.

Consumer Service Manual in respect of 9 distribution
companies was approved and circulated to all DISCOs for
implementation.

Complaint Handling and Dispute Resolution Procedure
Rules, 2009 is under review and will be sent to Federal
Government shortly for approval and notification.

Since creation of a Consumer Affairs Division in 2002,
NEPRA received 5,553 complaints, out of which 5,326 were
resolved.
26
COMPLAINTS HANDLING
Year
Complaints
Received
Complaints Addressed
through Provincial Offices
of Inspection/DISCOs
2001
76
76
2002
187
172
2003
237
225
2004
354
325
2005
1098
1025
2006
548
527
2007
503
503
2008
469
469
2009
663
654
2010
1418
1350
27