NEPRA Considers Approving K-Electric Solar Projects

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) indicated on Tuesday that it might approve the tariff for two K-Electric photovoltaic solar projects. This comes after the power company pledged to revise its financial estimates to align with current financial forecasts, rather than those initially presented during the bid evaluation phase.

The Authority convened separate public hearings to review the Auction Evaluation Reports (AER) for the proposed development of a 120 MW Solar PV Project at Deh Halkan and a 150 MW Solar PV Project at Deh Metha Gar.

However, the acceptance of a single bid for the 120 MW solar PV project at Deh Halkan raised concerns, as it was perceived as a potential infringement of PPRA Rules. Notably, KAPCO submitted the lowest bids for both projects.

Hearing Details

The Nepra Authority, led by Chairman Waseem Mukhtar, presided over the hearing. The KE delegation included CFO Aamir Ghaziani and Mudassar Zuberi, along with their legal representatives.

Amina Ahmed, Member Law, emphasized that the power utility must provide justification for accepting the project bid.

KE countered that NEPRA Regulation 12(1)(i) of NEPPR 2022 stipulates the following: (i) “competitive auctions must have a minimum of two qualified bidders, ensuring no commercial interests among them. However, under special circumstances and urgent needs, the Independent Auction Administrator or supplier of last resort may, with Authority approval, accept a single qualified bidder’s bid if it does not surpass the benchmark tariff.” and (ii) Regulation 12(1) mandates at least two qualified bidders for a competitive auction, but the proviso allows KE to accept a single bid in specific instances.

KE clarified that the regulations state that the Authority must approve any acceptance of a single bid.

During the session, KE representatives revealed that the Deh Halkani and Deh Mehta projects are expected to generate cumulative savings exceeding Rs 86 billion over the next 25 years. KAPCO submitted the lowest bids for both projects, at Rs 9.83 per unit and Rs 10.61 per unit, respectively.

The power utility company stated that they sent a letter to NEPRA on October 9, 2024, seeking clarification on the financial bid opening in the absence of a benchmark tariff. NEPRA responded on November 20, 2024, after which KE proceeded with the financial bid opening.