Nepra approves Modification in Generation License of KEL

September 16, 2021 (MLN): National Electric Power Regulatory Authority (NEPRA) has approved Modification in Generation Licence No. GL/04/2002 dated November 18, 2002, in respect of K-Electric Limited (KEL).

The modification was approved pursuant to Section-26 of the NEPRA Act read with Regulation 10(11)(a) of the NEPRA Licensing (Application and Modification Procedure) Regulation 1999.

According to the notification issued, Nepra granted a Generation Licence (No. GL/04/2002 dated November 18, 2002, and subsequent modifications from time to time) to KEL for its six distinctly located generation facilities/thermal power plants under Section-14B of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997.

Through Modification-lX dated December 07, 2020, the 942.32 MW RLNG based CCPP at Bin Qasim (BQPS-III) was included in the generation fleet of KEL whereas Unit No.3&4 (2×210 MW) of Bin Qasim Power Station-I/BQPS-I were excluded from the Generation Licence of KEL on account of low plant availability due to frequent forced outages, high cost of fuel and low efficiencies.

KEL, in its proposed modification statement to Nepra, recommended that it be allowed to utilize Unit-3 of BQPS-1 to generate power on an interim basis during the summer of FY 2021 i.e., from May 2021 till July 2021 and the addition of Pakistan LNG Limited (PLL) as back up RLNG supplier in its Generation Licence for BQPS-1 and BQPS-Il in addition to Sui Southern Gas Company Limited (SSGC), the main fuel supplier for (Natural Gas and RLNG).

In the statement of “Reason in Support for Modification”, KEL submitted that to ensure maximum facilitation to the consumers and to bridge the demand/supply gap during the peak summer period, after considering all available options emphasizing on least cost of generation and immediate availability of power, it has made Unit-3 of BQPS-1 available for power generation for a period of three months.

Furthermore, regarding the addition of PLL as an alternate RLNG Fuel Supplier, KEL has stated that to ensure a secure supply of RLNG at an adequate pressure, it has entered into Heads of Agreement (HoA) with PLL for a firm supply of 150 MMCFD RLNG as the primary fuel for BQPS-lll pursuant to a decision of CCoE dated March 27, 2020, and is also in discussions with PLL for an additional supply of 100 MMCFD RLNG for BQPS-1 and BQPS-ll as an alternate backup fuel supply.

Regarding the impact of the proposed modification on tariff, KEL inter alia indicated that the operation of Unit-3 on Furnace Oil will result in a slight increase in tariff, however, it is in the best interest of consumers as it will avoid resultant load shed during summer. Further, KEL has stated that procurement of RLNG from PLL will result in lower cost per unit at BQPS-1 and BQPS-lI, and the impact will be passed on to the consumers in the form of a lower tariff.

Regarding the impact of the proposed modification on the Quality of Service and the Performance of its obligations under the Licence, KEL assured that the requested modification would benefit consumers as it would ensure that the generation capacity continues to be available and maintained. Moreover, there will be no adverse impact on the quality of service provided by KEL.

After examining the entire case in detail including the already granted Generation Licence, earlier modifications in the Generation Licence, Multi-Year Tariff (MYT) granted to KEL, information submitted along with the application of LPM and relevant rules & regulations, Nepra considered that considers that the LPM will not have any adverse effect on the performance of the Licensee of its obligations as it will enable the Licensee/KEL to provide continuous power supply to the consumers.

Further, the LPM will be beneficial to the consumers in general as it would result in availability/continuity and reduction in the cost of supply in future. The LPM is reasonably necessary for the Licensee to perform its obligations under the Licence.

The LPM is necessary to ensure the continuous, safe and reliable supply of electric power to the consumers keeping in view the financial and technical viability of the Licensee, therefore, the Authority in terms of Section-26 of the NEPRA Act of the Licensing Regulations approves the communicated LPM in the Generation Licence of KEL, with changes.

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Posted on: 2021-09-16T16:27:32+05:00

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