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NEPRA Issued Show cause Notice To KAPCO For Extension In PPA

admin-augaf by admin-augaf
July 26, 2022
in Business, News
Reading Time: 2 mins read
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NEPRA Issued Show cause Notice To KAPCO For Extension In PPA

NEPRA Issued Show cause Notice To KAPCO For Extension In PPA

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Lahore July 26 2022: The  National  Electric  Power  Regulatory  Authority  (NEPRA)  has  issued  a  show  cause notice  (received  on  July  25,  2022)  to  the  Kot Addu Power Company  in respect  of  the  extension  of  the  Company's  Power  Purchase  Agreement  (PPA)  for  a  period of  485  days  pursuant  to  the  terms  agreed  between  the  Company  and  the  Power  Purchaser for  settlement  of  the  liquidated  damages  dispute  between  the  Company  and  the  Power Purchaser  by  invoking  the  terms  of  the  PPA  under  Other  Force  Majeure  Events  (OFME).

The notice is issued under  section  27B  of  Regulation  of Generation,  Transmission  and  Distribution  of  Electric  Power  Act,  1997  (NEPRA  Act)  read with  relevant  rules  and  regulations  alleging  prima  facie  violation  of  Regulation  6  (2)  of NEPRA  Interim  Power  Procurement  (Procedures  and  Standards)  Regulations,  2005.

Through  the  show  cause  notice,  NEPRA  has  sought  reply  of  the  Company,  to  be  submitted not  later  than  fifteen  days  of  receipt  of  the  show  cause  notice,  as  to  why  appropriate  legal action  may  not  be  taken  against  the  Company  under  relevant  rules  and  regulations  of  the NEPRA  Act,  inter  alia,  including  imposition  of  fine  as  prescribed. 

KAPCO’s  position that  the  extension  of  the  PPA  for  485  days  is  within  the  terms  of  the  PPA  and  Company's application  for  extension  of  generation  license  was  filed  with  NEPRA  within  the  period stipulated  in  the  applicable  regulations.  Hence,  there  is  no  breach  by  the  Company  of  any applicable  regulations.The  Company  will  contest  the  show  cause  notice  as  per  law  by, inter  alia,  submitting  a  detailed  reply  within  the   stipulated  period  and  will  vehemently present  its  case  before  NEPRA  and  all  relevant  forums  that  there  is  no  breach  by  the Company  of  any  rules  and  regulations  under  the  NEPRA  Act.

Kot Addu Power Company Limited was incorporated in Pakistan on April 25, 1996 as a public limited company under the Companies Ordinance, 1984 (now Companies Act, 2017). The principal activities of the Company are to own, operate and maintain a multi-fuel fired power station with fifteen generating units with a nameplate capacity of 1,600 MW in Kot Addu, District Muzaffargarh, Punjab, Pakistan and to sell the electricity produced therefrom to a single customer, Pakistan Water and Power Development Authority (WAPDA) under a Power Purchase Agreement (PPA).

Source: Pakistan Stock Exchange

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Tags: KAPCONEPRANoticePPAShow Cause
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