NEPRA introduces historic reforms to meet electricity demand

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved the detailed design of Competitive Trading Bilateral Contracts Market (CTBCM).

According to details, NEPRA has approved CTBCM, which will open a competitive wholesale market for electricity in Pakistan. According to the detailed design approved by CTBCM, this competitive electricity market will be operational in Pakistan by April 2022, according to NEPRA.

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CTBCM will bring business transparency, payment terms and adequate availability of production capacity to meet the country’s electricity demand. The National Electric Power Regulatory Authority says that CTBCM will be beneficial for large consumers especially industries, which will pave the way for the retail sector and regional market after the electricity wholesale market.

CTBCM will usher a new era of transparency, predictability and credibility whereby electricity shall be traded like any other commodity. It has the potential to turn-around the overall technical, financial, commercial, and legal climate resulting in the much needed improvements in the overall governance of the wholesale market.

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CTBCM will provide the large consumers with the much needed options to actively trade electricity founded on competitive market based principles. This eventual systemic improvements in the wholesale market will consequently have the trickle-down effect, for other consumers, resulting in more competitive prices in the days to come, it further said.

CTBCM Implementation Plan, as approved by NEPRA, is itself a huge undertaking and challenge to be completed within the next 18 months to roll out the CTBCM by April 2022. This reform plan entails actions ranging from institutional strengthening to augmenting legal and regulatory framework. Interventions covering people, processes and technological aspects will provide a non-discriminatory open access to all market players.

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CTBCM will also contribute to improve the security of supply, enhancing efficiency, amplifying payment discipline in the wholesale market operations and advancing conditions to move away from the historical sovereign guarantees-based regime.

NEPRA will keep a rigorous monitoring check on the CTBCM implementation to ensure its timely and effective implementation for achieving the desired results of affordability, reliability and sustainability of power services in Pakistan.

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It may be recalled that yesterday NEPRA has increased the price of electricity by 48 paisa per unit. The increase in the price of electricity was made in the context of the August fuel price adjustment. NEPRA said that the production cost of electricity in August was Rs 3.68 per unit, while the advance fuel cost of electricity in August was Rs 3.20 per unit.

Additional recovery from consumers will be made in the November bill, the decision will not apply to electric consumers, the increase in the price of electricity will put a burden of more than Rs 5 billion on consumers.

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