KAPCO Petitions NEPRA to Renew License and Increase Tariff

Kot Addu Power Company Ltd (KAPCO) has filed a tariff petition with the National Electric Power Regulatory Authority (NEPRA) for a reference generation tariff, which will allow it to continue selling electricity until the authority grants it a new permanent tariff following an extension of its production license, which expired on Monday.

According to a stock filing. the independent power producer (IPP) seeks renewal of its agreement with NEPRA despite having its generation license renewed by the regulator last month for a term of three years.

KAPCO’s original power purchase agreement (PPA) from 1996 came to an end on October 24. As a result, the operator of a 1,600-megawatt multi-fuel plant will be unable to sell electricity to the original PPA’s sole power purchaser.

The filing explained that the Company has submitted an application for Reference Generation Tariff (Tariff Petition) under the Regulation of Generation, Transmission, and Distribution of Electric Power Act, 1997, and the rules and regulations made thereunder including the NEPRA (Tariff Standards and Procedure) Rules. 1998 before NEPRA on even date (October 24, 2022).

The Central Power Purchasing Agency (CPPA) and the Company have agreed to enter into a new power purchase agreement for the sale and purchase of electric power. The term of the new power purchase agreement is being proposed by KAPCO to be five years, subject to applicable legal and regulatory formalities, including approval of the generation tariff by NEPRA pursuant to the Tariff Petition, it read.

As NEPRA has yet to arrive at a determination in respect of the Tariff Petition and the Original PPA will expire on the scheduled date, the Company has requested the regulator vide application dated October 24, 2022, for grant of Provisional Tariff Approval for the interim period for the operational and dispatch requirements of the Power Purchaser and the system.