CCP applauds Nepra’s decision to maintain net metering regulations

ISLAMABAD: The Competition Commission of Pakistan (CCP) has welcomed the decision of the National Electric Power Regulatory Authority (Nepra) to maintain the existing Nepra (Alternative and Renewable Energy) Distributed Generation and Net Metering Regulation, 2015, a statement said.

The decision comes after Nepra proposed amendments to the net metering regulations, which raised concerns over competition.

The proposed amendments would have replaced the National Average Power Purchase Price (NAPP) with the National Average Energy Purchase Price (NAEPP), resulting in a decline in the amount payable to the distributed generators and prosumers (consumers and customers who both produce and consumes electricity).

The CCP had reservations over the proposed amendments and conveyed its concerns to Nepra in November 2022. The power regulator assured to give due consideration to all the stakeholders’ views before reaching a decision on the proposed amendments.

The Competition Act, 2010, mandates the CCP to review policy frameworks for promoting competition and making suitable recommendations for amendments to any law affecting competition in Pakistan to the government.

The commission noted that the proposed amendments would have been detrimental to the distributed generators and prosumers, who made investments in the solar systems based on the policy provisions, agreement with their respective distribution companies and a licence from Nepra.

After receiving concerns from various sources, the CCP highlighted it to the Nepra that Pakistan’s energy sector heavily relies on costly imported fuels with thermal power dominating the energy mix and renewables contributing very little.

Despite the savings from distributed generation, the rising international oil prices, inefficiencies in the distribution companies, limited fiscal space and global renewable energy efforts contradict Nepra’s proposed amendments.

Nepra in its decision dated February 10, 2023, recognised the advantages of net metering, including displacement of expensive electricity, savings in the foreign exchange and minimal losses.

The proposed amendments would have also placed distributed generators and prosumers at a disadvantage, compared with other generation companies and the independent power producers.

Moreover, the distribution companies would have purchased electricity units from distributed generators at Rs9/kWh (existing rate is 19.32kWh) and sold them to the end consumers on the grid at a significant markup. However, Nepra’ss recent decision would result in equal treatment to all the players in the sector.

The CCP supports Nepra’s decision and looks forward to continued collaboration to promote competition, fair play, and equal treatment to all the players in the sector.