MUSHTAQ GHUMMAN

ISLAMABAD: The Power Division has directed National Electric Power Regulatory Authority (Nepra) to amend wheeling of electric power regulations aimed at adding displaced capacity charges to the wheeling charge for one year.

Nepra through SRO No. 549(1)2016 of February 13, 2016 issued notification of wheeling of electric power regulation 2016. The purpose of the regulation was to open to market and move towards bilateral trade of energy between buyers and sellers without intermediaries like CPPA as single buyer. Since its notification in 2016, not much headway was made because of certain observations of key stake- holders regarding the regulation.

According to Power Division, the following are few examples that were highlighted by the stakeholders during a discussion held in the Ministry: (i) Wheeling producer- several producers (especially in renewable energy field, primarily solar, wind and biomass) willing to supply to private wheeling customers on bilateral basis without benefit of Implementation Agreement or CPPA backed long term PPAs. Thermal (coal and gas) based generation may enter this market at a later stage when market is more mature and there is critical mass-scale at purchaser levels.

(ii) Disco - Input stage- required only if the wheeling producer is going to be located in a Disco other than where the wheeling consumer is located; and if the wheeling producer is inputting power at 132 Kv. If at 220 Kv then only NTDC network is required. For wheeling cases where input and output stages are the same, Discos need to clearly publish capacity to intake power at different locations and at different voltages, along with a detailed tariff table showing Use of System Charges which Nepra allows them to charge and sales taxes, etc. standard draft wheeling agreements need to be in place.

(iii) NTDC- NTDC needs to clearly publish its capacity to intake/out-take power at different locations and planned capacity so that wheeling producers can identify the gaps which can be used for wheeling. It also needs to clearly publish the detailed tariff table showing use of system charges which Nepra allows them to charge and sales taxes, etc. Standard draft wheeling agreements need to be in place. NTDC is simply transmitting from one load center to another so should not be responsible for banked energy, which is the remit of the individual Disco.

(iv) Disco - Output Stage - can only deliver wheeled power to consumers at 132 KV and for single user feeder; 11 KV and for single user feeder; and 11KV at transformer substation level.

(v) Banked energy - Practically impossible for wheeling consumption and production to be perfectly synchronized by the minute, so there will always be “banked” energy. Questions are: (i) banked for one day, one month, one year or perpetual: suggest one year as maximum period, and then may be settled as per mechanism enshrined in Clause 8.4.3 of the Renewable Energy Policy, 2006;(ii) allow re-sale of banked energy to other users at any voltage within same DISCO (subject to higher use of system charges if multiple voltage levels involved); (iii) if consumer consumes more units than wheeled input then consumer would settle as per mechanism enshrined in clause 8.4.3 of the RE Policy, 2006; and (iv) penalties for system faults, load-shedding and failure to supply should be in place.

Power Ministry, in its official statement said that in order to resolve this issue meetings were held to develop a request to a regulator for making appropriate charges in the subject regulation for the purpose of this regulation to take effect. The following is submitted for consideration of the Authority as modification to the regulation: (i) The regulation should be limited to wheeling on dedicated feeders (132 and 11 Kv) for loads above 1 MW. The wheeling should be limited to licence area of a distribution company. No inter-Disco trade be allowed for the time being; (ii) any interested consumers utilizing this regulation should be allowed to retain utility connection for which relevant charges will be paid by them; and (iii) in case of non- utilization of the energy by the buyer, banked energy should be allowed for a month after that the seller should either sell this energy to another buyer (other than Disco ) or shut down the plant. It will not be mandatory for the Disco to buy this energy.

The Power Division further added that in case the bulk consumer is taken out from the consumer base, of a distribution company, the displaced capacity charge should be added to the wheeling charge for a period of one year or new tariff determination, whichever is later.