The National Electric Power Regulatory Authority has yesterday slapped a fine of million rupees on Central Power Purchasing Agency (CPPA) for deliberately violating the explicit directions of the authority regarding submission of the fuel price adjustment (FPA) data in specific time period.

NEPRA has imposed, the first ever penalty on CPPA, under rule 6 of the NEPRA (Fines) Rules 2012. The fine was slapped after NEPRA rejected CPPA’s response to the show cause notice and providing a hearing to it.

According the National Electric Power Regulatory Authority (Nepra) the penalty was slapped because Central Power Purchasing Agency (CPPA) has ‘deliberately’ violated the explicit directions of the authority regarding submission of the fuel price adjustment (FPA) data to it in specific time period.

As per rules, NEPRA is required to make fuel price adjustments within a period of seven days on monthly basis and CPPA is to submit the requisite details to hold a hearing for fuel cost adjustment.

NEPRA has time and again issued several instructions to CPPA to submit the monthly information of FPA by 3rd of every month, but CPPA did not submit the requisite information within the prescribed time and violated the explicit directions of the Authority.

Therefore, the Authority decided to initiate proceedings against CPPA by issuing an explanation under NEPRA (Fines) Rules, 2002 for failure to provide the requisite information as well as non-compliance of the directions of the Authority with respect to monthly Fuel Price Adjustments.

The response to explanation was found un-satisfactory and a show-cause notice was issued as to why a penalty up to Rs. 100 Million may not be imposed on CPPA. The Authority after receiving response of the show cause and detailed deliberations on the issue decided to provide an opportunity of hearing to CPPA.

The submissions made by CPPA in writing as well as during the hearing were declared as unsatisfactory for the following reasons:

The plea of CPPA that it has always tried to meet up the timelines given by the Authority is not correct. An analysis of monthly FPA data/information submitted by CPPA for the period from January 2014 to April 2015 shows that it has failed to provide the desired information within the time period stipulated by the Authority.

The metering data of all common delivery points becomes available at 2400 hours of the last day of the month to work out/prepare the Fuel Charges Adjustment data/ information, thus any delay in compilation of the data beyond the Authority’s stipulated time frame is not justified.

Since the cut-off date for submission of monthly Fuel Charges Adjustment data was fixed after consultation and agreement with NTDC/CPPA, therefore, they are bound by their commitment.

The second proviso to Section 31(4) explicitly directs that the Authority may on monthly basis and not later than a period of seven days make adjustments in the approved tariff. Therefore, in order to comply with the statutory requirements, it is the duty of the CPPA to provide the requisite data as directed by the Authority within three days of the close of the month. Failing to do so has resulted in imposition of fine on CPPA.