ISLAMABAD: The Power Division has asked the National Electric Power Regulatory Authority (Nepra) to restrict wheeling (sale and purchase) of electricity into the national grid through dedicated feeders of 132 kilovolt (kV) and 11kV lines.

In a letter sent to the regulator, the Power Division has also solicited purchase of electricity from producers above one megawatt (MW) capacity by distribution companies and transmission companies. The Power Division has sought amendments to Nepra, Wheeling of Electric Power Regulations 2016 in this regard.

An official said the changes to the existing regulations were demanded to ensure system’s stability and predictability in view of sufficient power generation capacity contracted by the government over the past few years and simplify the sale and purchase of electricity in a dynamic market.

Under the existing regulations, every transmission licensee and distribution company (Disco) was required to “offer non-discriminatory open access to its respective transmission or distribution system and inter-connection services to applicants who are either connected or intend to be connected to the transmission and distribution” network.

Now, the Power Division has proposed that “regulation should be limited to wheeling on dedicated feeders (132 and 11 kV) for loads above 1MW” and the “wheeling should be limited to licensee of a distribution company and no inter-Disco trade be allowed for the time being”.

The Power Division has also proposed that interested consumers utilising this regulation should be allowed to retain utility connection for which relevant charges will be paid by them.

“In case of non-utilisation of energy by the buyer, banked energy should be allowed for a month after that the seller should either sell this energy to another buyer (other than Disco) or shut down the plant. It will not be mandatory for the Disco to buy this energy”, the Power Division said.

It said that in case the bulk consumer was taken out from the consumer-base of a distribution company, the displaced capacity charge should be added to the wheeling charge for a period of one year or new tariff determination whichever is latter.

A former senior official of the regulator said the proposed changes to the wheeling regulations suggested the government was trying to make it increasingly difficult for the time being to restrict entry of oscillating consumers and players into the national grid because that could take away business from the existing network operators.

The power division, however, said the purpose of the 2016 regulations was to move towards bilateral trade of energy between buyers and sellers without intermediaries like Central Power Purchasing Agency (CPPA), as single buyer, but not much headway was made because of certain observations of key stake holders regarding the regulation.

It said there were questions how the wheeling producers (especially in renewable energy field, primarily solar, wind and biomass) could supply to private wheeling customers on bilateral basis without benefit of implementation agreement or CPPA backed long-term power purchase agreements.

Thermal-based (cola and gas) generation could also enter this market at a later stage when the market has matured.

Likewise, the Discos were required at the input stage if the wheeling producer was inputting power at 132kV. If the input is at 220kV, then only NTDC network is required.

“For wheeling cases where the input and output stage Disco was the same, Discos needed to clearly publish capacity to intake power at different locations and at different voltages, along with a detailed tariff table showing ‘Use of System Charges’ approved by the regulator along with sales tax which Nepra allows them to charge and sales taxes, etc.

Almost similar requirements were set for National Transmission and Dispatch Company (NTDC), while Discos were also required to suggest if they should deliver wheeled power to consumers at 132kV, 11kV feeder level, or at transformer substation level.

The Power Division also had reservations over the banked energy sale, purchase and wheeling and believed it was practically impossible for wheeling consumption and production to be perfectly synchronised.

Published in Dawn, March 20th, 2018