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Actual Regulation Faced by DISCO: Legal Anomaly
Actual Regulation Faced by DISCO: Legal Anomaly
Un-Electrified
PEPCO Area
Residents
Others
Gencos
Transco
Lenders/IFIs
Share holders,
DISCO
Investors
Management
Consumer
License
• Distribution License, defining exclusive territory.
• Exceptions made in territory for MES, Housing Colonies &
Small Power Producers (SPPs), already selling, distributing.
• Transmission license to NTDC, defining territories,
Transmission Voltage Levels and future Power Structure.
• Generation License to Small Power producers.
• Non discriminatory access or use of system mandatory
through the Transmission and Distribution License.
Distribution License, Contentious Issues
• DISCOs, under PEPCO, reluctant to accept “regulatory regime”
resisted acceptance of Distribution License, refused to pay fees.
• Initial Issues
Carving exceptions in exclusive territory. Housing colonies, MES
Generation License/permission to SPPs for sale.
License fee rates too high.
• Recent Issues
Distribution license to Bahria Town Housing Scheme.
Actual Regulatory Dispensation, Tariff
• First Tariff determination for WAPDA power wing in 1999.
proceedings according to TS&P Rules 1998.
• Uniform tariff for all DISCOs except KESC.
• Life line rates, differentiated rates and multi year tariff.
• Transfer Price for DISCOs established.
• Fixed rates for Irrigation and FATA consumers abolished.
• Time of day metering introduced.
• Historical Losses accepted, with targets for reduction.
Tariff
Initial contentious issues
• Cost of Service not adequately compensated.
• Efficiency targets unrealistic for Losses and recovery.
• Time to convert to Time of Day, unrealistic.
• Difficulty in implementation of Irrigation and FATA Tariff
Tariff Later Issues
• Cost of Service no compensated for fuel price increase.
• NEPRA determines Cost based rates for each DISCO. Results in
different rates for same categories across DISCOs.
• Government notifies uniform tariff for all DISCOs as (Schedule
2), different than NEPRA determined rates (Schedule 1).
• All DISCOs made to charge the lowest tariff amongst DISCO.
• Commitment to provide subsidy for difference between
NEPRA determined rates and applicable consumer rates.
NEPRA Actual Tariff DispensationGoP notifies uniform
determines tariff as schedule 2
DISCO requests
rates for different than
NEPRA for cost
each DISCO determined by
based tariff.
and sends to NEPRA as schedule
GoP for DISCO directed by 1. Difference to be
Notification. GoP to charge paid as subsidy to
schedule 1 only. every DISCO.
WAPDA
Hydro
DISCOs
DISCOs Other
Dispatch
DISCOs
Central
GEN
Nuclear
Provision of Service
Imports
Financial Flows
Single Buyer Arrangement KESC
WAPDA Finance
Hydro (Power)
WAPDA Bulk Power
Consumers
IPPs
Thermal
DISCOs
DISCOs Other
Dispatch
DISCOs
Central
KAN
Nuclear NUP
GEN
Provision of Service
Imports
Financial Flows
Single Buyer Arrangement KESC
WAPDA Finance
Hydro (Power)
WAPDA Bulk Power
Consumers
IPPs
Thermal
DISCOs
DISCOs Other
Dispatch
DISCOs
Central
KAN
Nuclear NUP
GEN
Provision of Service
Imports
Financial Flows
Bilateral Contract Model
Financial Flows
Old Provision of Service
IPPs
Bilateral Contracts
WAPDA
Hydro
Ex. WAPDA
DISCOs
Nuclear Bulk Power
Network Operator
Consumers
CPPA Other Dist.
GENCO
System Operator Companies
1 Other
Consumers
GENCO
NTDC
Large
2 Consumers
CONTRACT REGISTRAR
SETTLEMENT
GENCO
3
Contracts Information
New IPPs
GENCOs
Options for DISCOs Response
• Factors beyond control of DISCOs.
• DISCO is not responsible for load shedding! who is?
• Knock the door of Government?
• Go to Court???
• Accept the Regulatory dispensation and Government
involvement.
• Within the given environment, improve Corporate
Governance.
• Enhance capacity (quality of Human Resource, Skills).
• Reduce Costs. (Energy Loss reduction programms,
Operational efficiency, resource use).