ISLAMABAD - The National Electric Power Regulatory Authority (Nepra) has imposed a fine of Rs20 million on Pesco and CPPAG for not executing Power Purchase Agreement (PPA) for the purchase of electricity from Pehur Hydropower projects with Khyber Pakhtunkhwa.

“Nepra has imposed fine of Rs10 million each on Peshawar Electric Supply Company Limited (Pesco) and Central Power Purchasing Agency (Guarantee) Limited (CPPAG) on account of non-execution of Power Purchase Agreement (PPA) with Pakhtunkhawa Energy Development Organisation (PEDO) regarding 18MW Pehur Hydel Power Project since March 1, 2010,” said NEPRA decision. The authority further decided that in case of non-execution of PPA, on Pehur Hydro project, within three months, a fine of Rs500,000 per day shall be imposed on the CPPA.

In its decision, the authority concluded that the Pesco failed to execute the PPA for the last seven years and has purchased power on rates not approved by Nepra. During the legal proceedings, Pesco failed to submit any plausible reason for non-payment of dues. It also failed to comply with the directions of provision of information required by the authority and disregarded the letter written in this respect. Keeping in view the aforementioned violations committed by Pesco and the gravity of such violations, the authority declares Pesco as delinquent under rule 4(13) of the Nepra (Fines) Rules, 2002 and has decided to impose a fine of Rs10 million on Pesco under Nepra (Fines) Rules, 2002.

Regarding the CPPA-G, the authority has observed that under the Nepra (Market Operator Registration, Standard and Procedure) Rules, 2015, it is the duty of CPPA to procure power on behalf of Discos. However, it failed to fulfill its obligation and also forced the power producer to agree on terms and conditions which were never approved by the authority.

Therefore, the authority declares CPPAG as delinquent under rule 4(13) of the Nepra (Fines) Rules, 2002 and impose a penalty of Rs10 million on CPPAG. The 18MW Pehur Hydropower Project was developed by the KP government in Swabi district downstream Gandaf pressure tunnel. The project started generation on March 1, 2010 following which it started supplying electricity to Pesco's 132KV grid station at Gadoon in Swabi district.

When contacted on the issue, Khyber Paktukhwa Power and Planning Chief Planning Syed Zainullah Shah told The Nation that for the past seven years Pesco and CPPAG are reluctant to sign an agreement with the provincial government. He said that in the absence of PPA, Pesco had been paying Rs1 per unit to the provincial government under a temporary arrangement in line with the national power policy. Nepra in its tariff determination has fixed Rs4.8 per unit for Pehur Hydropower project.

Since out of the determined tariff rate, Pesco is only paying Rs1 per unit and the remaining amount of Rs3.8 per unit is being added to the arrears. The total arrears have been accumulated to Rs1.6 billion, so far, and Pesco will pay it to the provincial government after the signing of PPA, he said.