PAKISTAN Law and Practice Contributed by: Nadir Altaf and Muhammad Fahim Khan, RIAA Barker Gillette
• obligation to provide information to NEPRA; and • revocation and suspension. 5.4 Eminent Domain, Condemnation or Expropriation Rights to Construct and Operate Electricity Distribution Facilities Rights over the land required for the construction and operation of distribution facilities are acquired in the same way as the equivalent process described in 4.4 Eminent Domain, Condemna- tion and Expropriation Rights to Construct and Operate Transmission Lines and Associated Facilities for transmission companies. 5.5 Monopoly Rights for Electricity Distribution Entities Historically, by virtue of the NEPRA Act and their licences, distribution companies have enjoyed the exclusive right to provide distribution servic- es within their specified service territories. Since the 2018 Amendment Act to the NEPRA Act, however, the provision for exclusivity has been removed. Although licensees that have already been granted exclusivity will continue to enjoy it until the expiry of those licences, they will not be granted exclusivity thereafter. Distribution com- panies’ licences are now non-exclusive. 5.6 Electricity Distribution System Charges and Terms of Service The principal laws governing the provision of distribution service, regulation of distribution charges, and terms of service include: • the NEPRA Act; • Distribution Licensing Rules; and • the Tariff Rules. The following is a non-exhaustive list of details that NEPRA takes into consideration when determining a distribution tariff:
• cost of power procurement; • revenue requirements;
• investment and expansion requirements; • operation and maintenance requirements; • consumer requirements; • subsidies; and • line losses. Pursuant to Section 31 (2) of the NEPRA Act, the regulatory principles that NEPRA must take into account when determining a distribution tariff include: • the protection of consumers against monopo- listic and oligopolistic prices; • the research, development and capital invest- ment programme costs of licensees; • the encouragement of efficiency in licensees, operations and quality of service; • the encouragement of economic efficiency in the electric power industry; • the economic and social policy objectives of the federal government; and • the elimination of exploitation and minimisa- tion of economic distortions. Under the 2018 Amendment Act, the sale of elec- tric power to consumers is licensed separately under the supply licence rules and regulations. XW-Discos are treated as suppliers of last resort (ie, required to service all consumers in their ter- ritory according to the NEPRA-approved terms and tariff). There are different tariffs for different types of consumers. The broad categories are:
• residential consumers; • commercial consumers; • industrial consumers; and • bulk power consumers.
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