Nepra gives decision on KE’s 7-year investment roadmap

The authority approves investment of Rs392.49b

ISLAMABAD  -  The K-Electric (KE) has failed to convince the National Electric National Electric Power Regulatory Authority (NEPRA) for Rs484 billion investment plan, as the authority has approved an investment of Rs392.490 billion within next seven years, and decided for a comprehensive 3rd party independent audit of the plan.

In its decision in the matter of investment plan and losses assessment for K-Electric Limited for transmission and distribution business for the Multi-Year Tariff (MYT) control period of seven years from FY2023-24 to FY2029-30, NEPRA has approved the investment plan of Rs392.490 billion. KE had claimed an investment plan of Rs484 billion. The approved investment plan includes Rs238.220 million transmission business, Rs136,764 million for distribution business, Rs17,306 million for other support plans and Rs200 million for 3rd party audit fees. KE had claimed cost of Rs140,751 million for growth projects in the transmission segment. The authority after making adjustments has decided to approve an investment of Rs120,805 million under the head of Transmission Growth Projects.

The petitioner claimed that it requires Rs24,039 million for routine corrective and preventive maintenance activities on the existing system. The authority has decided to allow the requested amount of Rs19,007 million to KE for grid stations and transmission lines maintenance, protection, and improvement to ensure the overall system reliability as well as continuity of supply. The petitioner submitted an overall investment requirement of Rs45,180 million, comprising of Rs21.952 million against transmission rehabilitation works and Rs23,228 million for provision of N-I contingency. However, the authority approved an investment of Rs38,503 million for system reliability to ensure N-I contingency compliant transmission system of KE during the MYT control period from FY 2023-24 to FY 2029-30. KE has claimed an amount of Rs3,859 million for transmission safety which comprised of Rs3,209 million for relocation of overhead transmission lines; however, the authority after various deduction has approved an amount of Rs2,684 million to KE for safety in the transmission network.

KE has claimed Rs7,604 million for augmentation at the NKI grid station. The authority after making deduction has decided to approve the claimed investment of Rs6,404 Million to KE; however, the same is subject to consent/finalisation of modalities between KE and NTDC regarding proposed augmentation works at NKI. Similarly, the authority excluded the cost of Rs568 million claimed by KE for IPPs metering. KE has claimed an investment of Rs3,171 million for capacitor bank installation at 11 kV level; however, the authority approved an investment of Rs2.556 million under the head of the transmission loss reduction programme.

Against the KE claim of Rs4,103 million, the authority has decided to allow an investment of Rs3,326 million for the interconnection of 500 kV KKI and 220 kV Dhabeji with the National Grid (NTDC network). The petitioner has claimed an investment of Rs7,523 million for the addition of a transmission line for 350MW solar power projects situated in Gharo Corridor. However, the NEPRA approved investments of Rs5,183 million. Against the claimed amount of Rs14,963 million for power evacuation from 600MW WPP-Solar Power Projects to be established in Gahro Corridor, NEPRA has allowed an amount of Rs12,825 million.

Against KE’s claim for an investment of Rs37,105 million for the common system, the regulator has allowed Rs29,461 million on account of distribution growth projects. KE has claimed cost of Rs64,622 million for energy loss reduction programme, Rs19,933 million for rehabilitation of existing LT ABC and Rs15,279 million claimed for the network rehabilitation programme. However, the authority has allowed the authority hereby allows a total investment of Rs43,323 million on account of ELR Programme.

KE has claimed an investment of Rs40,496 million for overhauling and maintenance of the existing distribution network but the authority approved an amount of Rs29,919 million. The authority approved an amount of Rs20,546 million under the head of Distribution Safety, against the claim of the investment of Rs25,858 million. The authority decides for a comprehensive 3rd party independent monitoring/audit of K-Electric’s allowed investment plan. The third party audit / monitoring of allowed investments will be carried out on quarterly basis. The ToRs and mechanism of 3rd party audit/monitoring will be formulated by NEPRA. The authority also decides to include an indicative cost of Rs200 million in the investment plan of KE for the purpose of 3rd party audit/monitoring of investment plan.

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