PAKISTAN Law and Practice Contributed by: Nadir Altaf and Muhammad Fahim Khan, RIAA Barker Gillette
to a bulk power consumer (typically, large industrial consumers that consume more than 1 MW)). The 2018 Amendment Act to the NEPRA Act also: • established the NEPRA appellate tribunal, which functions independently from NEPRA, in order to hear appeals against NEPRA’s decisions; • removed the exclusivity rights for sale of electric power of DISCOs in relation to their respective service territories; • introduced the national electricity policy for the development of power markets (the “NE Policy”), which is to be prepared by the federal government and approved by the CCI; and • introduced the national electricity plan (the “NE Plan”), which is to be prepared by the federal government with assistance from NEPRA and in consultation with the provincial governments. The NEPRA (Amendment) Act 2021 restructured NEPRA’s powers relating to calculation of the consumer end tariff and allowed the federal gov- ernment to add surcharges to the consumer end tariff. The NEPRA (Electric Power Procurement) Regu- lations 2022 (the “EPP Regulations”) were noti- fied in 2022, which restructured the method of power procurement on behalf of DISCOs, such that the DISCOs are now entitled to purchase power directly from generation companies. These EPP Regulations are a significant step towards realising the CTBCM, to the extent that Pakistan’s power sector will no longer be a “sin- gle buyer” model but will instead transition to a “single buyer plus” model. The EPP Regulations
also introduced the requirement for generation tariffs to follow the least cost procurement prin- ciple, as encapsulated in the IGCEP. In 2023, sets of rules were approved that established a minimum technical and financial criterion to be met for businesses engaged in providing electric power services such as dis- tribution, supply and transmission. NEPRA has issued the Power Safety Code, 2024, outlining specific operational criteria for licensees to fol- low to reduce the impact on the public and the environment. Protection of Existing Exclusivity Rights Historically, the NEPRA Act has granted exclu- sivity to DISCOs in their respective service ter- ritories. Section 22 (1) of the NEPRA Act granted case-by-case second-tier supply authorisations to generation companies and DISCOs that want to directly supply consumers within the service territories of other DISCOs. However, Section 22 (1) was subject to a sunset clause that limited its effectiveness for a peri- od of 15 years from the commencement of the NEPRA Act (ie, until the year 2012). In addition to removing the exclusivity right of DISCOs in relation to their respective service territories, the 2018 Amendment Act removed Section 22 (1)’s sunset clause so that NEPRA could continue to issue second-tier supply authorisations. Notably, as well as granting second-tier supply authorisations to generation companies prior to 2012, NEPRA also continued to grant them from 2012 (ie, when Section 22 (1) was no longer effective) up to 2018 (ie, the revival of Section 22 (1)) and beyond. It is worth mentioning, however, that NEPRA phased out the second-tier supply authorisations following the introduction of the supply licence via the 2018 Amendment Act. The
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