KAPCO wants a temporary tariff. A power generation company requests that NEPRA declare tariffs for five years.
Kot Addu Power Company (Kapco) has asked for interim pricing in Karachi so that it can keep providing the government with energy until the regulatory body grants it a new permanent tariff in response to an extension of its production license, which expired on Monday. Although the government renewed the production license for three years, the private power generation business has filed to the National Electric Power Regulatory Authority (Nepra) for a new tariff for five years.
The company has installed 1,600 megawatts of installed power generation capacity using a variety of fuels, including natural gas, furnace oil, and diesel. More crucially, the company’s plants are operating in a key area where minimal production is required to maintain the national grid. Additionally, it features the “Black Start” option, which enables it to restart the nation’s transmission system in the event of a complete failure, as it did a few times recently. According to a recent source, Kapco has consented to forego its right to capacity payments (under the extended license) in exchange for the money it had got for capacity during the outages.
However, throughout the extended term, the corporation will continue to collect payments for the supply of energy and other pass-through items. The National Electric Power Regulatory Authority renewed the company’s generation license on September 8, 2022, for a period of three years (expiration date: September 24, 2024), according to a notification Kapco sent to the Pakistan Stock Exchange (PSX) on Monday. A new contract for the sale and purchase of electric power has been agreed upon by the company and the power purchaser (the government/CPPA-G). “The company is recommending a five-year period for the new power purchase agreement, subject to all necessary legal and regulatory formalities, including Nepra’s acceptance of the generation tariff in response to the tariff petition.
The original PPA (power purchase agreement) will expire on even-date (October 24, 2022), and Nepra has not yet made a decision regarding the tariff petition, according to the statement. “The company has requested Nepra… for grant of provisional tariff approval for the interim period for, among other things, meeting technical, operational, and dispatch requirements of power purchaser and the system,” it said. With 1.63 million shares changing hands at the stock exchange, Kapco’s share price increased 0.58% (or Rs0.16) to settle at Rs27.22. According to Nepra, Kapco has requested an extension of its generation license for an additional ten years.
In its request for license renewal, Kapco stated that the operation of its generation facility was crucial since it provided power to Multan Electric Power Company’s (Mepco) and National Transmission and Despatch Company Limited’s grid stations (NTDC). It is important to note that the aforementioned facility is a base load power plant, particularly during the busiest summer months. With 12 transmission lines, six on 132kV and six on 220kV, interconnected by a transformation capacity of 500 KVA, Kapco has a significant presence in the national grid. According to the records, the complex has retained the “Black Start” capacity to assist in speedy recovery in the event of transmission collapse.
