ISLAMABAD-The distribution licence of K-Electric Limited (KEL) and its exclusivity is due to expire on July 20, as the company has sought 20 years extension in the terms of its licence.
K-Electric Limited (KEL) has requested to extend the term of its distribution licence for another period of 20 years (up to July 20, 2043) in line with Regulation-5(2) of the NEPRA (Distribution) Regulations, 2022 read with Section-20 of the NEPRA Act 1997 (as amended) in accordance with the approved CTBCM design including any subsequent determination(s) made by the Authority, said NEPRA.
It is worth mentioning here that in its decision in the determination of the Authority in the matter of Authority Proposed Modification in the Distribution Licence of K-Electric Limited, issued by NEPRA in April 2021, the regulator had stated: “Authority has decided to honour the terms of distribution licence of KEL and maintain its exclusivity till the expiry of its distribution licence i.e. July 20, 2023 conditionally,”.
The decision further stated that “The Authority has carried out its own due diligence on the pros and cons of removing the exclusivity. In this regard, the Authority is of the considered opinion that there are valid reasons to remove the exclusivity and at the same time there are strong arguments to maintain the same due to potential implications on the future investments in KEL as well as lack of immediate alternate arrangement. The Authority is cognizant of the fact that Section 21 of the NEPRA Act has been amended after the NEPRA (Amendment) Act, 2018 and the exclusivity has been done away with, therefore KEL, as such, cannot claim exclusivity in its Service Territory. Further, KEL cannot claim one sided right to exclusivity when it has failed to fulfill its legal obligations to the consumers. Accordingly, the Authority believes that KEL has no exclusivity after the NEPRA (Amendment) Act, 2018. However, considering the potential implications on the future investment of KEL, privatization and other related matters as highlighted by Privatization Commission, Ministry of Energy and exclusivity of KEL, as provided in Article 7 of its Distribution Licence, the company has allowed to maintain its exclusivity till the expiry of its distribution licence i.e. July 20, 2023 .
KEL has submitted a request for renewal/extension in the term of its distribution licence issued July 21, 2003 as stipulated in Regulation-13 of the NEPRA licensing Procedure Regulations, 2021 (the “Licensing Regulations”). As per existing distribution licence, the Service Territory of KEL for distribution of electric power extends to the city of Karachi and adjoining areas of Sindh and Balochistan. In its petition KEL has stated that its existing distribution licence had a term of twenty (20) years which will expire on July 20, 2023. KEL has further submitted that it is operating in the above-mentioned territories of the country and serving 3.4 million consumers and it is in the interest of the consumers and the electric power industry as a whole to ensure the continuous, safe and reliable supply of electric power for which renewal/extension in the term of Distribution Licence is essential.
NEPRA has invited all stakeholders, interested/affected persons and the general public to offer their comments in favor or against the proposal of KEL for renewal/extension in the term of distribution licence within fourteen (14) days.