ISLAMABAD - The National Electric Power Regulatory Authority has allowed Central Power Purchasing Agency Guarantee (CPPA-G) to charge the market operator fee of Rs2.71/kW per month for the FY2021-22.

Central Power Purchasing Agency Guarantee (CPPA-G), for provision of market operator and allied services, is allowed revenue requirement of Rs.63.67 million and to recover its assessed fees of Rs 2.71/kW/month for the FY2020-21, based on average monthly MDI of 26,535 MW for the FY 2021-22. The CPPA-G in its petition had requested Nepra’s approval for determination of its market operator fee (MoF) for the FY2021-22, FY2022-24 and FY2023-2024 @ Rs.5.036 per kW/month for FY2022, Rs.2.854/kW/month for FY2023 and Rs.2.968/kW/month for FY2024 respectively.

The Authority considered petitioner’s request for the immediate application of the proposed fee and noted that market operator fees determined by the Authority for the FY2020-21 are already being charged by the petitioner during the period under consideration, therefore, the request of the petitioner for immediate application of the proposed fee is not logical and does not merit consideration. Since the impact of any such adjustments has to be made part of the consumer end tariff, therefore, the Authority, in order to provide an opportunity of hearing to all the concerned and meet the ends of natural justice, decided to conduct a hearing in the matter.

The hearing in the matter was held on November 10, 2021. The Authority observed that although CPPA-G has submitted its Power Purchase Price (PPP) forecast for the FY 2022-30, however, PPP references are required to be updated periodically in order to cater for the impact of upcoming addition. The Authority observed that the petitioner provides the plant wise energy generation and fuel costs data in its monthly FCA requests, however, for other details i.e. plant wise capacity charges and cost billed to DISCOs, CPPA-G is not fully complying with the direction, as the information is provided on quarterly basis instead of monthly basis.

Similarly, details in terms of deviation from EMO, showing hourly generation along-with financial impact for deviation from EMO, and the reasons thereof, in coordination with NPCC, while submitting the monthly FCA data, CPPA-G has started submitting such reports, however, the same does not comply with the directions and format as required by NEPRA. Likewise, the party wise breakup of amounts payable & receivables as per the agreed formats, in addition to the monthly circular debt reporting is not being provided. The Authority observed that as per the certificate of registration issued to CPPA-G on November 16, 2018, the Terms of Commencement of Registration is for 5 year commencing from May 28, 2018. Thus, the Registration of CPPA-G expires on May 27, 2023. Further, as explained by CPPA-G during hearing of the instant Petition, CTBCM will be functional w.e.f. 01.05.2022, whereby MO function would be separated from the existing functions of CPPA-G.

The spirit of Multi Year Tariff (MYT) is to provide predictability in tariff and cash flows not only for the petitioner but also to the consumer, therefore, keeping in view the facts that registration of CPPA-G is only till May 2023, and going forward MO function would be separated from CPPA-Gs existing function, the Authority has decided to approve the instant tariff petition only for a period of one year i.e. FY 2021-22. CPPA-G may file Multi Year Tariff Petition once both CPPA-G and MO functions are legally separated and a clear break-up of costs and manpower is available for both the organizations. In view thereof, the Authority has decided to treat the instant MYT Petition of CPPA-G as a single year Petition and CPPA-G is directed to file the MYT petition after segregation of MO Function and keeping in view its Registration

In its order, the regulator said that CPPA-G shall charge the DISCOs, a transfer charge for procuring power from approved generating companies & its delivery to DISCOs for a billing period as under; CPPA-G shall, for the purpose of clarity intimate to all XVTDISCOs or any other Market Participant the generation part of the Transfer Charge, during a billing period, by deducting from the Transfer Charge, the Transmission Charge or Use of System Charges of NTDCL and the Market Operator fee of CPPA-G.

The Authority after excluding the pay & allowances and other benefits of employees who resigned or deputed back from CPPA-G, and applying thereon the increases on pay and allowances for the remaining employees, the amount of pay & allowances works out as Rs.444 million for the FY 2021-22, against requested amount of Rs.455 million. The same is hereby allowed to the petitioner for the FY2021-22. Similarly, amount of employee benefits has also been worked out in similar manner and the same comes out as Rs.83 million for the FY 2021-22, which is hereby allowed to the Petitioner for the FY 2021-22. Regarding bonus, the Authority has decided to allow one month basic salary for the FY2021-22, which works out as Rs.21.551 million, against the requested amount of Rs.38 million.

Since the costs requested against vacant posts has not yet been incurred by CPPA-G, therefore, the Authority has decided not to allow this cost upfront, however, such costs would be considered by the Authority, once the petitioner incurs such cost after following all the required SOPs and obtaining all relevant approvals etc. and provides justification in this regard.

The Authority considers that keeping in view the existing huge in-house strength of IT professionals, CPPA-G shall manage IT services in-house rather than outsourcing the same. Accordingly, the Authority has decided not to allow any cost on account of IT consultancy for the FY 2021-22. Regarding consultants hired for the BPR and grid code, the Authority noted that grid code is the responsibility of system operator i.e. NPCC/ NTDC at present, therefore, hiring of any consultant by CPPA-G in this regard is not relevant. In view thereof, the Authority has decided to allow only Rs. 1.2 million to CPPA-G under the head of consultancy expenses for the F’Y 2021-22.