CMOD roadmap, targets: Nepra gives CPPA-G Feb 25 deadline

While showing serious concern at CPPA-G’s lethargy in a meeting to discuss milestones of Competitive Trading Bilateral Contract Market (CTBCM), the National Electric Power Regulatory Authority (Nepra) gave a deadline of February 25, 2022 to submit complete roadmap on Commercial Market Operation Date (CMOD) along with targets, well-informed sources told Business Recorder.

The regulator conveyed its irritation to CPPA-G after the second Monthly Progress Review Meeting (MPR) on the implementation of CTBCM held on January 28, 2022.

On November 9, 2021, Prime Minister presided over a meeting of his economic team, wherein he directed Power Division to ensure early introduction of CTBCM.

On February 14, 2022, Nepra wrote a letter to Chief Executive Officer (CEO), CPPA-G, in which concerns were expressed on undue delays in implementation of CTBCM.

The regulator, in its letter to CEO, CPPA-G, said that it has noted with great concern that the registration application of CPPA-G with regard to management of pre-CTBCM electric power procurement contracts entered into on behalf of the distribution licencees i.e. Discos, along with the revised draft Code which, as per the CTBCM approved plan, was originally due in July 2021 has still not been submitted after a delay of seven months. The matter was also discussed in the 6th MIMG meeting wherein it was apprised that the application will be submitted to Nepra on November 30, 2021, which is still pending.

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Keeping in view the prolonged delay in achieving the targets, CPPA-G was directed to submit the registration application along with the revised draft code at the earliest but not later than February 15, 2022 which has lapsed.

The regulator further stated that the restructuring of market operator by legal separation from CPPA-G is also behind schedule as this was to be completed by January 2022.

The Nepra has directed CPPA-G that due process must be completed at the earliest. According to the regulator, it is also important to highlight that the draft Market Commercial Code submitted by CPPA-G is required to be thoroughly revised in light of the observations of the Authority conveyed through various emails and during the session held in LUMS in January 2022.

The Nepra has maintained that the Code must be resubmitted at the earliest without any delay as the deadline for resubmission i.e. February 5, 2022, has already lapsed.

Moreover, as per the approved CTBCM design, the commercial allocation methodology and allocation factors of pre-existing contracts entered into by CPPA-G were to be submitted for approval of the Authority in February 2021.

Once approved, the proposed changes will also be incorporated in the Power Purchase Agency Agreement (PPAA). However, despite lapse of more than one year, this has not been submitted to the Authority which needs to be expedited without any further delay.

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The power sector regulator further contended that deployment of Market Management System (MMS) is critical for efficient and smooth functioning of the power market. The pace of its implementation is quite slow and there is no visible progress in this regard.

Nepra has directed CPPA-G that the required action be completed at earliest and bi-weekly progress reports are submitted to it.

The regulator has also noted that there are significant delays in completion of critical actions by CPPA-G, and that it expects that the former as the central coordinator, takes up the pending actions with the relevant entities to devise a way-forward strategy to avoid further delays and ensure the timely commencement of the market by the approved deadline of May 1, 2022.

However, extra-ordinary delays in completion of its own assigned tasks by CPPA-G raise serious concern as to the commitment of CPPA-G to meet the Commercial Market Operation Date (CMOD).

CPPA-G has been directed to ensure expeditious completion of all pending actions without any further delay.

The sources said, CEO, CPPA-G has been directed to provide at the latest by February 25, 2022, a complete roadmap to the Authority with relevant milestones depicting expected completion of all the essential actions (pertaining to CPPA-G as well as other relevant entities with whom CPPA-G is to coordinate) before CMOD.

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