NEPRA provisionally approves KEL's distribution license renewal for 6 months

July 20, 2023 (MLN): The National Electric Power Regulatory Authority (NEPRA) has provisionally approved K-Electric’s request for the renewal/ extension of its distribution license for six months.

To note, KEL submitted the request for renewal/extension in terms of its Distribution License No. 09/DL/2003 dated July 21, 2003, which the Authority had granted in terms of Section-21 and Section-25 of the original NEPRA Act 1997 for a period of twenty years, as per the notice issued by NEPRA on Wednesday.

NEPRA Act 1997 was amended in the year 2018 whereby certain fundamental changes were made and the distribution function was restricted to the wire/physical infrastructure business only and to allow the supply of electric power, Section-23E was introduced.

Section-23E gave a deemed status for the Supplier License for a period of five years from the promulgation of 2018 amendments in the NEPRA Act.

Distribution Licenses under the previous provisions of the NEPRA Act expired on April 26, 2023.

In this regard, KEL initially submitted a consolidated application for renewal/extension of its Distribution License as well as for its Electric Power Supplier License.

“The Authority considered the submissions and directed KEL to file a separate application for the grant of Electric Power Supply License as its deemed period already lapsed,” the notice reads.

Moreover, a notice for seeking comments from stakeholders was published in the press on June 23, 2023, and letters have also been sent to relevant stakeholders to solicit their comments on the matter.

The aforementioned matter was discussed in Regulatory Meeting held on July 17, 2023, in which a conclusion was laid to hold a public hearing on the matter.

It was decided that KE should be allowed to continue its operations for the duration of the regulatory process, which will take around 3-6 months, as per media reports on certain conditions;

Firstly, KEL shall not have any exclusivity for the provision of Distribution and/or Electric Power Supply services, as the Authority reserves the right to issue other licenses in the Service/Concessional Territories.

The provisions of Article 7 of Distribution License DL/09/2003 regarding "Exclusivity" will no longer apply, as they are not permitted under section-21 of the amended NEPRA Act.

Moreover, KEL will be obligated to allow Bulk Power Consumers (BPCs) to obtain supply from any generation company as mentioned in the amended NEPRA Act.

Lastly, the entity will be obligated to allow the use of its system by any third party for the purpose of supplying/wheeling electric power to any BPCs.

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