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).