ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Friday approved a tripartite power purchase agreement (TPPA) among K-Electric, National Transmission and Despatch Company (NTDC) and Central Power Purchase Agency (CPPA) for 150MW additional power supply to Karachi from the national grid.

Under the TPPA, power generation of 50MW each from wind power plants of Tenaga, Zephyr and Hydro China Dawood will be supplied to KE through the national grid.

The Economic Coordination Committee (ECC) of the cabinet had already approved the additional 150MW power supply to Karachi. The ECC had “decided that this arrangement is completely separate and would have no nexus whatsoever to the existing agreement for supply of 650MW by NTDC to KE”.

Nepra had also provisionally cleared the agreement subject to a clear mechanism for treatment of non-project missed volumes (NPMV). However, KE later reported to the regulator that detailed methodology for NPMV allocation either to the Karachi-based power utility or the NTDC network would be agreed separately as part of operating procedures to be developed by an operating committee as required under the TPPA.

The regulator said that based on KE’s revised petition it had now accorded ‘final approval’ of the TPPA. “The detailed methodology for NPMV allocation and payment mechanism will be agreed separately between K-Electric, CPPA and NTDC as a part of operating procedures to be developed by the operating committee under clause 2.4 of TPPA,” Nepra said, directing the three parties to finalise it at the earliest.

This may, however, not resolve Karachi’s power shortages in the looming summer because of non-resolution of issues relating to fuel supply arrangements and additional power demand arising out of diversion of natural gas from industrial captive power plants as part of the federal government’s decision to enhance power consumption.

Operation of 450MW first unit of the KE’s 900MW new RLNG-fired power plant at Bin Qasim may also not materialise in time due to delays in signing of KE’s gas supply agreement (GSA) with Sui Southern Gas Company (SSGC) and other issues. KE has been reporting to the federal government and the regulator that its first unit is on track for commissioning ahead of summers subject to fuel availability.

The fuel availability remains uncertain in the absence legal arrangements despite involvement of the federal government and its desire to steer clear the situation through involvement of the Supreme Court which declined to be drawn into the commercial and executive decision making. SSGC had been reluctant to sign a GSA until the settlement of dispute over payables. Unless KE’s 450MW plant is completed and tested by April/May in the absence of a valid GSA, the power utility may well not have RLNG needed to operate the power plant.

While KE and Pakistan LNG Limited had signed an agreement a few months ago for 150mmcfd RLNG supply, the pipeline system and the custody transfer station required to carry this gas to KE’s site belongs to SSGC where the issue of non-payments again crops up.

Published in Dawn, March 6th, 2021