NEPRA imposes Rs 1 million fine on CPPA



The National Electric Power Regulatory Authority (NEPRA) on Monday imposed a fine for the first time of Rs 1 million on the Central Power Purchasing Agency (CPPA) after rejecting its response to a show cause notice and after conducting a hearing.

NEPRA declared that NTDC had deliberately violated the explicit directions of the authority regarding submission of the fuel price adjustment data in the specified time period.

NEPRA is required to make fuel price adjustments within a period of seven days on monthly basis and CPPA is required to submit the requisite details to hold a hearing for fuel cost adjustment. NEPRA had issued several instructions to CPPA to submit the monthly information of FPA by 3rd of every month.

Despite NEPRA’s instructions, the CPPA did not submit the requisite information within the prescribed time and violated the explicit directions of the Authority. Therefore, the Authority decided to initiate proceedings against CPPA by issuing an explanation under NEPRA (Fines) Rules, 2002 for failure to provide the requisite information as well as non-compliance of the Authority’s directions.

The response to explanation was found un-satisfactory and a show cause notice was issued as to why a penalty of up to Rs 100 million may not be imposed. The authority after receiving response of the show cause and detailed deliberations on the issue decided to provide a hearing to CPPA.

The submissions made by CPPA in writing as well as during the hearing were declared unsatisfactory. The plea of CPPA that it had always tried to meet the timelines given by the authority was found to be incorrect. An analysis of the monthly FPA data submitted by CPPA for the period from January 2014 to April 2015 showed that it had failed to provide the requisite information within the time period stipulated by the authority.

NEPRA sources say that the metering data of all common delivery points becomes available at 2400 hours of the last day of the month to work out and prepare the Fuel Charges Adjustment data and information, thus any delay in compilation of the data beyond the Authority’s stipulated timeframe is not justified.

The target date for submission of monthly fuel charges adjustment data was fixed after consultation and agreement with NTDC/CPPA.

The second proviso to Section 31(4) explicitly directs that the authority may on monthly basis and not later than a period of seven days make adjustments in the approved tariff. Therefore, in order to comply with the statutory requirements, it is the duty of the CPPA to provide the requisite data as directed by the authority within three days of the close of the month. Failing to do so has resulted in imposition of fine on CPPA.