Nepra imposes Rs50m fine on Iesco for grid delay

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has imposed a fine of Rs50 million on the Islamabad Electric Supply Company (Iesco) for delaying the approval of grid interconnection studies, which led to significant losses for the national exchequer.

In its decision regarding the show-cause notice issued to Iesco, Nepra stated that the company failed to adequately respond to the notice concerning delays in the approval process for studies submitted by Access Solar Private Limited and Access Electric Private Limited.

Nepra emphasized that its ruling was based on a thorough review of the submissions and arguments presented by Iesco, as well as relevant provisions of the Nepra Act and Nepra (Fine) regulations, 2021.

The regulator found that the delays in issuing the Power Evacuation Certificate (PEC) to both companies contributed to substantial financial loss. Iesco has been directed to pay the fine to Nepra’s designated bank within 15 days of the order’s issuance. Should Iesco fail to comply, Nepra reserves the right to recover the amount as arrears of land revenue or pursue other legal avenues. Iesco contested Nepra’s allegations during a hearing, claiming that it had approved the interconnection of both solar power plants at the 11kV level and that the delay was not its fault.

The company argued that during the approval process, it is standard to assess constraints in the overall system, not just in specified areas. Despite claiming sufficient approvals to achieve financial closure, Nepra concluded that these claims were not substantiated by the facts of the case.

The regulator highlighted that Iesco’s prior approvals in 2012 and 2020 were irrelevant to the current situation, as the sponsor repeatedly failed to execute the projects on time, often filing tariff petitions based on various issues, including technology changes.

Nepra noted that the PEC was issued only after a delay of seven months, which could have been resolved much sooner. In response, Iesco described Nepra’s conclusions as flawed and based on unfounded assumptions, asserting that it was not responsible for the delays in financial closure. However, Nepra dismissed these assertions as invalid and baseless, emphasizing the need for compliance and accountability in the sector.