CTBCM design: NEPRA, NTDC on the warpath

National Electric Power Regulatory Authority (Nepra) and National Transmission and Despatch Company (NTDC) are said to be on the warpath with respect to implementation of the Competitive Trading Bilateral Contract Market (CTBCM), sources close to Chairman Nepra told Business Recorder.

Sharing the details, sources said, the Authority, in a letter to Managing Director NTDC, expressed serious annoyance at the latter’s letter in which serious questions were raised on the design of CTBCM.

“The Authority is extremely disappointed at the highly unprofessional letter in which NTDC has raised very basic queries,” Nepra said adding that all aspects were addressed almost two years ago in the Authority’s CTBCM design determinations on December 5, 2019 and November 12, 2020.

Nepra has claimed that the CTBCM design, as approved by the Authority, is endorsed in the National Electricity Policy. These determinations contained clear timelines and directions for NTDC to restructure and apply for the System Operator licence (February 2020) that was anticipated to be completed by September 2021. NTDC, being an important stakeholder and a participant of CTBCM design approval process, is expected to act more responsibly instead of trying to reopen the already decided matters.

According to Nepra, NTDC appears to be deliberately attempting to dent the CTBCM reforms in order to maintain the status-quo, adding that Nepra Act recognizes the critical role of System Operator being a center piece of the electric power market and requires it to be an independently licenced activity.

Nepra gives final touches to seven regulations for CTBCM execution

The sources claim that during Nepra’s approval of the CTBCM design and afterwards, NTDC has been an integral part of all the consultations, meetings, brain-storming sessions and trainings thus clearly understanding its critical role in CTBCM to perform the following functions: (i) generation scheduling; (ii) unit commitment and dispatch; (iii) transmission scheduling and generation outage coordination; (iv) transmission congestion management; (v) procurement and scheduling of ancillary services; and (vi) system planning for long term capacity and marginal price discovery.

“The Authority is surprised that such a critical entity is asking such basic questions after formal launch of the CTBCM on May 31, 2022,” the sources said, adding that the Authority expects that all important entities including NTDC rises up to the expectations of the nation in implementing the NEPRA Act instead of making lame excuses. The Authority further argued that it is high time that NTDC fully realizes its critical role in the CTBCM and actively works towards implementation of these national level reforms as directed through various NEPRA letters, in Market Implementation and Monitoring Group (MIMG) meetings held for facilitating implementation of the CTBCM Roadmap. In all these meetings NTDC had agreed on the given deliverables.

Moreover, under section 23G (1) of the NEPRA Act, NTDC is deemed to be system operator only for a period of 2 years from commencement of the NEPRA (Amendment) Act, 2018. Whereas, reportedly, the Federal Government is working for lifting five-year moratorium on section 23G of the NEPRA Act even before its end date in April 2023, it is important that all the requisite actions for successful operations of the CTBCM are completed in the meantime (in line with the spirit of section 22 of the General Clauses Act, 1897) and grant of system operator licence is one of the key actions in this regard.

On its part, Nepra has notified the relevant regulations for implementation of CTBCM including Nepra Licensing (Application, Extension, Modification and Cancellation) Regulations, 2021 which specify the procedure for application to obtain the System Operator licence.

“NTDC has been part of the consultative process for development and notification of these regulations and therefore, NTDC’s queries appear to be in bad faith, disingenuous and ill-advised,” the sources said, fearing that that NTDC has willfully contravened the directions of the Authority in violation of section 48 of the NEPRA Act.

The Authority directed MD NTDC to explain his position in this regard at the earliest but no later than fifteen days from the date of receipt of letter of July 7, 2022 and appear for personal hearing on July 28, 2022.

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