PAKISTAN Law and Practice Contributed by: Nadir Altaf and Muhammad Fahim Khan, RIAA Barker Gillette
NEPRA Licensing (Electric Power Supplier) Reg- ulations 2022 require that a year after notifica- tion of the same (which was 28 March 2022), all generation companies with a second-tier supply authorisation must apply for a supply licence to sell power to consumers. Therefore, the sale of power to consumers by generation companies that once fell under the second-tier authorisation of the generation licence is now regulated under the supply licence regime. The Islamabad High Court ruled that DISCOs’ existing exclusivity rights could not be retroac- tively withdrawn. However, the latest licences issued to DISCOs do not include exclusivity provisions. 1.7 Announcements Regarding New Policies New National Electricity Policy 2021 Pursuant to Section 14 (A) of the NEPRA Act, the federal government is required to prescribe an NE Policy – with the approval of the CCI – that encompasses: • development of systems based on optimal utilisation of resources such as coal, natural gas, nuclear substances or materials, hydro and renewable sources of energy; • development of an efficient and liquid power market design; • integration of national and provincial trans- mission systems; • special provisions for ensuring the develop- ment of a sustainable renewable energy mar- ket with a dedicated and gradually increasing share in the electricity power sector; and • any other matter pertaining to the develop- ment, reform, improvement and sustainability of the power sector.
In 2021, the federal government introduced the National Electricity Policy 2021 (the “2021 NE Policy”). Prior to the 2021 NE Policy, the federal government had formulated the Power Genera- tion Policy 2015 (the “2015 Policy”), which set out specific incentives and protections for inves- tors developing thermal and hydro-based power projects with government support. The 2021 NE Policy, which is broader in scope but less specif- ic about the incentives and protections offered, did not replace the 2015 Policy – rather, the 2021 NE Policy supplements the earlier policy. In the event of any inconsistency between the two policies, however, the NE Policy shall take precedence over the 2015 Policy. The 2021 NE Policy signals the government’s growing focus on the following matters, among others, in respect of the electricity sector: • enhanced competition; • greater sustainability and environmental responsibility; and • privatisation of state-owned enterprises (especially the DISCOs). The 2021 NE Policy also provides that future procurement of electricity by the NTDC will be in accordance with the IGCEP and its inter- connectivity with the grid will be based on the Transmission System Expansion Plan (TSEP). The IGCEP is a plan prepared by the NTDC, under which it details the proposed acquisition of power from different generation plants based on an optimised tariff as calculated by a financial algorithm specifically developed for this purpose by the NTDC. The TSEP will be developed in order to connect new generation plants to the grid as required by the IGCEP. According to the 2021 NE Policy, the federal government, in consultation with the provin-
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