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NEPRA to change the licence of K-Electric in the public interest

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September 7, 2020 (MLN): The National Electric Power Regulatory Authority (Nepra) on Sunday issued a notice to seek the public comments in the matter of Authority Proposed Modification in the existing Distribution Licence of K-Electric Limited (KEL) within 03 days i.e. from September 6, 2020 to September 8, 2020.

Earlier, the authority had accused K-Electric (KE) of violating its contract and ignoring its responsibilities that have led to excessive power cuts and threatened to revoke its licence.

In July 21, 2003, Nepra had granted a distribution licence to K-Electric Limited, allowing exclusivity to provide distribution services, make sale of electric power, make schemes and engaging incidental activities in its Service Territory as stipulated in the Article 7 of its distribution licence.

Pursuant to recent amendments in the NEPRA Act, the exclusive right to provide distribution services by a licensee has been omitted as stipulated in section 21 of the Nepra Act. Further a new provision i.e. sections 23E has been inserted which provides for electric power supplier licence to make sale/ supply of electric power to a consumer. The holder of a distribution licence on the date of coming into effect of the Nepra amendment Act are deemed suppliers under section23E for a period of five years.

The Authority has noticed that KEL has not expanded/upgraded its distribution networks and is not fulfilling its obligations to supply electric power to all consumers in tis service territory as per terms and conditions of existing distribution licence.

In view of the said, the consumers of KEL are facing the excessive load shedding, safety hazards, excessive billing and other issues.

Further the Authority has also taken notice that several housing societies, industrial estates, shopping plazas /complexes and high-rise buildings have set up their own distribution system in the service territory of KEL.

The KEL is supplying electric power to such entities at one point for further delivery /resale to their residents/occupants. Such an arrangement between these entities and KEL tantamount to exclusion/ surrender of such areas from the service territory of KEL.

In this regard, Section 26 of the Nepra Act empowers the Authority to amend or vary the conditions of any licence issued under the Nepra Act in the public interest. In order to encourage competition for provision of electric power services in Karachi , to enhance efficiency , to ensure better price, quality of service, choice for consumers and to regularize the resale/distribution of electric power business, it is in the public interest to modify the terms of distribution licence of KEL, the notice revealed.

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Posted on: 2020-09-07T11:29:00+05:00

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