Nepra grants 20-year supplier licences to seven state-run power utility companies

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has issued separate supplier licences to seven state-run power distribution companies, allowing them to act as suppliers of last resort for 20 years.

The licences, which are valid from April 27, 2023, to April 26, 2043, were granted under Sections 23E and 23F of the Nepra Act, which separates the distribution and supply functions of the power sector.

The seven companies that received the licences are Faisalabad Electric Supply Company, Gujranwala Electric Power Company, Lahore Electric Supply Company, Multan Electric Power Company, Hyderabad Electric Supply Company, Peshawar Electric Supply Company, and Quetta Electric Supply Company.

A similar licence was previously issued to Islamabad Electric Supply Co., while two other Discos, Sukkur Electric Power Co. and Tribal Electric Supply Co., have not received their licences yet.

Nepra said in its decision that the licences were issued to avoid a legal vacuum after the expiry of the five-year deemed supplier status of the existing distribution licensees on April 26, 2023.

The supplier licences will enable the distribution companies to undertake power planning, demand forecasting, procurement, and supply to the consumers, including billing and recovery, and take over the responsibilities of private entities in case of default.

Earlier, the power planning, forecasting, and procurement functions used to be performed by the Central Power Purchasing Agency (CPPA-G) on behalf of Discos, while the distribution companies had no role in these activities as these entities were only selling power to consumers in its service territory.

The distribution companies will have to supply electric power to all the eligible consumers in their service territories at the rates and charges approved by Nepra, and also provide electric power supply to the bulk power consumers after default of their competitive suppliers.

Nepra said it may grant electric power supply licences to any other entity to act as a competitive supplier in the service territories of the distribution companies.

The Discos are required to provide open access to multiple electricity suppliers and consumers, adhering to the Competitive Trading Bilateral Contract Market, or CTBCM, a wholesale electricity market.

“The Licensee shall be responsible for the supply of electric power within its Service Territory on a non-discriminatory and non-exclusive basis to all the consumers who meet the Consumer Eligibility Criteria at the rates and charges determined and approved by the Authority and shall also be obligated to provide electric power supply to the bulk power consumers in its Service Territory after default of their competitive supplier,” a Napra decision said.

“Provided that the Authority may grant electric power supply license to any other entity to act as a Competitive Supplier in the Service Territory of the Licensee and the Licensee shall not claim any exclusivity concerning the Service Territory in this regard.”

Additionally, the licensee is required to submit an updated five-year business plan annually to the Authority, covering all major aspects of its licensed activities as outlined in procurement regulations and other applicable documents.