[AS INTRODUCED IN THE NATIONAL ASSEMBLY]

Bill

Further to amend the Regulation of Generation, Transmission and Distribution ofElectric Power Act, 1997

Whereas, it is expedient further to amend the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (Act No. XL of 1997) for the purposes hereinafter appearing;

It is hereby enacted as follows: -

1.         Short title and commencement:-

(1)           This Act shall be called the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Act, 2020.

(2)           It shall come into force at once.

2. Amendment of section 2, Act XL of 1997. - In the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997), herein after called as the said Act, in section 2,-

(a)            After clause (iii), the following new clause shall be inserted, namely:-

(iiia) "consolidated accounts" means the consolidated revenue requirement of distribution licensees compiled by the uniform tariff applicant, on the basis of tariff for such distribution licensees determined by the Authority based on actual and projected statements of expenses, receipts and income for such distribution licensee;"

(b)            For clause (xviia) the following shall be substituted, namely: -

 "(xviia) "market operator" means a person responsible for the organization,  administration of a wholesale electric power market and settlement among generators, licensees and bulk power consumers;";

(c)            In clause (xxvii), in sub-clause (b), the word "and", occurring at the end, shall be omitted

(d)            After clause (xxvii), amended as aforesaid, the following new clauses shall be inserted, namely, -

"(xxviia) "uniform tariff applicant" means the entity nominated by the common shareholder, wholly owning and controlling the distribution licensees directly or indirectly, for the purposes of compiling consolidated accounts on the basis of which  such entity shall seek determination of the uniform tariff for and on behalf of such  distribution licensees; and

(xxviib)"uniform tariff application" means an application filed by the uniform tariff applicant for the purposes of determination, modification and revision of the uniforrn  tariff;";

 In clause (xxviii), for full stop at the end, the expression "; and" shall be substituted; and

(f) After clause (xxviii), amended as aforesaid, the ibllowing new clause shall be inserted, namely,-

"(xxix) "Wholesale electric power market" means sale and purchase of electric  power between the Generation Company, licensees and bulk-power consumers."

3. Amendment of section 14B, Act XL of 1997. - In the said Act, in section 14B, in sub•,ection (4), for full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

"Provided that the Authority may specify different method of dispatch for generation facility connected below the minimum transmission voltage."

4. Amendment of section 14D, Act XL of 1997. - In the said Act, in section 14D, - In subsection (2), for full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely: -

"Provided that the Authority may specify different method of dispatch for generation facility connected below the minimum transmission voltage."

5. Amendment of section 21, Act XL of 1997. - In the said Act, in section 21, -

(a)          In sub-section (2),

 In clause (a), after the words "possess the", the word "exclusive" shall be Inserted; and

(ii) For the colon at the end a full stop shall be substituted and thereafter the proviso shall be omitted; and

(b)          After clause (b), the following new clause shall be inserted, namely:

' (ba) ensure timely submission of annual or multi year petitions and quarterly petitions, as specified by the Authority and to the extent applicable to it, ensure timely submission of all information and data to the uniform tariff applicant so that the uniform tariff application duly supported by consolidated accounts is moved by it within a period of fifteen days of intimation of tariff by the Authority under subsection (4) of section 31 :

Provided that in the event timely submissions are not made, then the Authority may call for requisite information in terms of section

6. Amendment of section 22, Act XL of 1997. - In the said Act, in section 22,-

(a)          In sub-section (2), for the words "one year", the expression "three years. or any other period as notified by the Federal Government,", shall be substituted, and at the end for full stop a colon shall be substituted and thereafter the following proviso shall be added, namely:-.

"Provided that such consumer shall continue to make payments to the distribution company equal to the amount of cross-subsidy for uneconomic service for which it would otherwise have provided through purchase of electric power by the bulk power consumer or any other charges determined by the Authority from time to time."

7. Amendment of section 23D, Act XL of 1997. - In the said Act, in section 23D, in sub-     section (2),-

(a) In clause (b), the word "bilaterally" shall be omitted and after the word "parties" the words "and in the wholesale electric power market" shall be inserted; and (b) In clause (g), the words "for power sales to consumers" shall be omitted.

8. Amendment of section 23E, Act XL of 1997. - In the said Act, in section 23E, -

(a)       'In sub-section 2, after clause (d), the following new clause shall be insened, namely:-

"(da) the type of consumer the supplier is entitled to serve;".

9. Amendment of section 31, Act XL of 1997. - (1) In the said Act, in section 31,(a) For sub-section (7), the following shall be substituted, namely:-

 "(7) Notification of the Authority's approved tariff or uniform tariff, as the case may be; rates, charges and other terms and conditions for the supply of electric power

services shall be made in the official Gazette by the Federal Government within thirty days of intimation of the same by the Authority. In the event the Federal Government fails to notify the tariff so determined by the Authority, or refer the matter to the Authority for reconsideration, within the time period specified above, then the Authority may direct immediate application of its recommended and approved tariff or uniform tariff as the case may be by way of notification of the same, subject to adjustment which may arise on account of reconsideration, if any, subsequently filed by the Federal Government:

Provided that the Federal Government may, as soon as may be, but not later than thirty days of receipt of the Authority's intimation of its recommendation, require the Authority to reconsider its determination of such tariff, rates, charges and other terms and conditions for electric power services, whereupon the Authority shall, within thirty days, determine these after reconsideration and intimate the same to the Federal Government:

Provided further that the Authority may, on a quarterly basis and not later than a period of fifteen days, make quarterly adjustments in the approved tariff on account of capacity and transmission charges, impact of transmission and distribution losses, variable operation and maintenance and policy guidelines as the Federal Government may issue and intimate the tariff so adjusted to the Federal Government prior to its notification in the official Gazette. The Federal Government may, as soon as may be but not later than fifteen days of receipt of the Authority's intimation of its recommendation for adjustment, require the Authority to reconsider its determination of such adjustment, whereupon the Authority shall, within fifteen days, determine these after reconsideration and intimate the same to the Federal Government. In the event the Federal Government does not refer the matter to the Authority for reconsideration, within the time period specified above, then the Authority shall notify in •the official Gazette the tariff so adjusted:

Provided also that the Authority may, on a monthly basis and not later than a period of seven days, make adjustments in the approved tariff on account of any variations  in the fuel charges and policy guidelines as the Federal Government may issue and notify in the official Gazette the tariff so adjusted."; and

(b)            After sub-section (7), substituted as aforesaid, the following new sub-section shall be added, namely:-

"(8) Notwithstanding anything contained in this Act and in addition to the tariff, rates and charges notified by the Federal Government under sub-section (7), each distribution company shall collect such surcharges from any or all categories of consumers, as the Federal Government may charge and notify in the official Gazette from time to time, in respect of each unit of electric power sold to any or all categories of consumers and deposit the amount so collected in such manner as may be specified by the Federal Government. The amount of such surcharges shall be deemed as a cost incurred by the distribution company and included in the tariff notified by the Federal Government under sub-section (7):

Provided that such surcharges shall be levied for the following purposes, namely:-

(a)            Funding any public sector project to the extent decided by the Federal Government and

(b)           Fulfilment of any financial obligation of the Federal Government with respect to electric power services to the extent decided by the Federal Government.

10. Amendment of section 32, Act XL of 1997. - In the said Act, in section 32,-

An sub-section (1), after the words "distribution companies"' the expression "and electric power supplier except a supplier, supplying exclusively to a bulk power consumer," shall be inserted;

(b) zln sub-section (2), after the words "distribution companies", the words "or electric power supplier except a supplier supplying exclusively to a bulk power consumer" shall be inserted; and

/ln sub-section (4),- after the words "distribution company", the words "or electric  power supplier except a supplier supplying exclusively to a bulk power consumer" shall be inserted and after the words "enter into", the words "long term" shall be omitted.

11. Amendment of section 51, Act XL of 1997. - In the said Act, in section 51, its existing provision shall be numbered as sub-section (l) thereof and thereafter the following new sub-section shall be added, namely:-

"(2) All notifications issued on behalf of the Federal Government in purported exercise of its powers under section 31 with respect to surcharge or additional charge, from time to time, and continued to be in field till the coming into force of the Regulation cf Generation, Transmission and Distribution of Electric Power (Amendment) Act, 2020, notwithstanding any omission or anything to the contrary contained therein or anything tc the contrary contained in any decree, judgment or order of any Court, shall be deemed to have been validly made and issued by the Federal Government and any amount charged, collected or realized by any distribution company from any consumer in pursuance thereof shall be deemed to have been validly charged, collected and realized.".

STATEMENT OF OBJECTS AND REASONS

AMENDMENT IN THE REGULATION OF GENERATION, TRANSMISSION AND DISTRIBUTION OF ELECTRIC POWER ACT, 1997.

NEPRA has been created to introduce transparent and judicious economic regulation, based on sound commercial principles, to the electric power sector of Pakistan. NEPRA reflects the country's resolve to enter the new era as a nation committed to free enterprise and to meet its social objectives with the aim of improving the quality of life for its people and to offer them opportunities for growth and development. Accordingly, in 1997 the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 was introduced.

2. Pakistan has been successful in attracting substantial foreign investment in the power sector, but the absence of a transparent regulator regime led investors to secure their investment. through long-term contracts. Consequently, a substantial part of the sector has been carved out for long-term contract regulation and the rest of the sector has to carry whatever risk arises from changing circumstances and realities. Pakistan has had to pay dearly for the absence of an acceptable and established regulatory environment for the commercial operation of the sector. For effective and improved of the Regulator, several amendments were made in the NEPRA Act in the year, 2017. Further clarity in working and efficiency of regulator, amendments are being proposed.

3. To further improve the NEPRA Act, these amendments are being presented to forth our clarity and precision in market operation, uniform tariff, timely submissions and determination of quarterly and annual tariffs.

MINISTER-IN-CHARGE

Power Division