ISLAMABAD: With the expiry of exclusivity of the existing distribution companies (Discos) and K-Electric, private entities have started seeking distribution licences for the supply of electricity to bulk power consumers (BPCs) at the retail stage.
The exclusive distribution licences of all the public sector Discos of formerly Wapda and KE have already expired and now are operating on temporary extensions or are on the verge of expiry. Most of the Discos still want their exclusivity to remain intact while some others like KE are willing to give up exclusive jurisdiction for power supply. They are now even seeking regulatory permissions to purchase and sell electricity to consumers of their choice on payment of wheeling charges through the competitive market.
The federal government and National Electric Power Regulatory Authority (Nepra) are already in the process of implementing a Competitive Trading Bilateral Contract Market (CTBCM) that has to ultimately generate competition among market players to the benefit of consumers in terms of both the quality of service and pricing.
At least two major firms have now come up with formal petitions for distribution licences including Nishat (Chunian) Ltd set up by Mansha Group and AB Electric Private Ltd (ABEPL) based in Islamabad. Nepra has already registered their applications for examination and sought stakeholders’ opinions on whether or not to issue them distribution licences.
While Nishat is yet to unfold its full business model, it has indicated intentions for operations for bulk sales at a later stage in the current distribution areas of Lahore and Faisalabad Electric Supply Companies.
Mansha Group had previously shown interest in the privatisation of Faisalabad Electric Supply Company more than a decade ago but the government’s privatisation plan ran into snags.
According to its regulatory filing, Nishat Chunian Ltd (NCL) is a leading textile company located in Bhai Pheru, specialising in the manufacturing and marketing of high-quality fabrics, garments, and home textiles. It has its power generation facility which operates a state-of-the-art coal-fired power plant, having a capacity of 46mw of indigenous coal-fired boilers and a steam turbine. It started its commercial operation in February 2017. “Currently we do not have any specific plan regarding this because electricity is being provided through an overhead transmission line which is already laid and property where BPCs are operating is very close to our facility”, it said.
On the other hand, ABEPL has sought a distribution licence for the sale of about 630MW of electricity to BPCs in all four provinces, particularly in special industrial zones.
“Our company will bill the industrial zones monthly,” said the company in its request to Nepra saying its billing payment cycle will be 30 days of invoice and in case of non-payments commits to follow standard debt recovery procedure, which may include disconnecting the power supply.
“To access the consumer metering systems, we will enter into agreements with the industrial zones for the installation and maintenance of the metering systems”, it said and promised to ensure accurate meters and billing based on actual usage in addition to standard emergency provisions and protocols in case of power outages or other unforeseen events.
ABEPL is a company registered with the Securities and Exchange Commission of Pakistan (SECP) for the design, construction, acquisition, ownership, operation, and maintenance of power generation complexes.
It also claims to be involved in the business of generating, purchasing, importing, transforming, converting, distributing, supplying, exporting, transmitting, and dealing in power generation, including electricity and all other forms of energy and products.
Published in Dawn, August 30th, 2023