LAHORE: The National Electric Power Regulatory Authority (Nepra) has formally launched the Competitive Trading Bilateral Contract Market (CTBCM)—a new model under which any of the bulk power consumers (one megawatt and above) may come out of the system of the power distribution companies (Discos) and procure electricity from the officially approved or designated power suppliers in the open market.

The new arrangement also allows the Discos to buy electricity from the open market and supply it to their customers through their distribution system (11kV to 132kV), Dawn has learnt.

“Since the CTBCM model/system is ready to deliver (with effect from May 31), it has now been launched formally. Under this arrangement, anyone planning to invest in the power generation in the form of having their generators, plants, units, etc (solar, wind, hydropower, etc) will first be liable to apply for a licence from Nepra through the respective Disco. After getting the license, the supplier would be declared eligible to sell the power to any bulk power consumer (1 MW and above) through auction or any other officially approved competitive bidding process in the open market. Similarly, the power purchaser would also be allowed to procure electricity according to the demand from the open market by leaving the existing suppliers (Discos) by serving a notice before switching on to a new system,” Lahore Electric Supply Company’s Market Implementation and Regulatory Affairs Director-General Altaf Qadir explained while talking to Dawn on Saturday. “However, electricity seller/supplier and buyer will have to pay the charges to the government for using the power despatch and distribution system,” he clarified.

It may be mentioned that Nepra in November 2020 approved a plan comprising 18 months leading to the CTBCM in a bid to shift the existing electricity market into a broader open market that can allow both buyer and seller to bilaterally procure and supply the electricity by leaving the existing arrangement where the consumers have no option but to buy power from the Discos.

“It is a wonderful system that gives liberty to any of the bulk consumers to buy cheaper electricity as per demand from the supplier of his/her choice. The Lesco like other Discos cannot avail of this facility right now since it already has a supplier license and is liable to procure and supply/distribute electricity under the existing model/arrangement till April, next year. After passing this date, the company would also be at liberty to opt for the new model,” Mr Qadir maintained. He said under the new system, the Central Power Purchase Agency (CPPA) has started working as the market operator as well as the special purpose agent.

Being a market operator, he said, the agency would register the investors issued power generation license from Nepra and maintain the record related to their power dispatch and distribution through the existing (dispatch and distribution systems) to the certain customers. Similarly being SPA, it would keep maintaining the existing power purchase, invoicing, payment, etc records related to Discos and other departments concerned, he added.

He said the Lahore University of Management Sciences had also organised a training-cum-orientation workshop in a bid to build the capacity of all respective stakeholders on the new model. Similarly, the Nepra chairman too paid a visit to the Lesco headquarters on Friday to have a briefing on this issue.

Published in Dawn, June 26th, 2022