NEPRA closes Show Cause notice against LPCL

ISLAMABAD: The National Electric Power Regulatory Authority (MNEPRA) has closed Show Cause notice against Lalpir Power Company Limited (LPCL) on account of failing to restart the plant after total collapse of power system in 2023.
According to the details, the total power system collapse occurred on January 23, 2023 at 07:34:43:800 Hrs which plunged the whole country into darkness and the system was completely restored on 24.01.2023 after 20 hours approximately. NEPRA, being a regulator of power sector, took cognizance of the incident and constituted an Inquiry Committee (IC) to probe into the matter. During the course of inquiry, the IC visited power houses, grid stations, sites, offices and obtained relevant documents to arrive at the right conclusion.
The information related to supply restoration time of power plants and synchronization of their units after complete system breakdown on January 23, 2023 was provided by System Operator (NPCC). The submitted information revealed that the supply at Licensee’s bus bar was restored at 00:03 Hrs on January 24, 2023 and the Licensee was instructed by NPCC through Notice to Synch (NTS) as per PPA to synch its complex at 07:13 Hrs on January 24, 2023. However, the Licensee had synchronized its complex at 11:22 Hrs on January 24, 2023 i.e. after a lapse of 04:09 Hrs, thereby, prima facie, the Licensee failed to comply with the NPCC’s instructions in a timely manner as per terms & conditions of PPA which severely hampered the restoration process of power system.
In view of the above, the Authority observed that the Licensee was bound to follow the instructions of the NPCC, which it failed to do. Hence, the Authority observed that the Licensee has, prima facie, failed to comply with Section 14B(4) of the NEPRA Act, Rule 10(6) of the NEPRA Licensing Generation Rules, 2000 and Clauses OC 8.1.1, 8.1.4, 8.2.1, 8.2.2 & 8.2.3 of the Grid Code. In view of the foregoing, the Authority decided to initiate legal proceedings against the Licensee under NEPRA (Fine) Regulations, 2021 (hereinafter referred to as the ‘Tine Regulations, 2021”).
Accordingly, an Explanation of September 22, 2023 was issued to the Licensee under Regulation 4(1) & 4(2) of the Fine Regulations, 2021.
In response, the Licensee submitted its reply vide letter of October 09, 2023. The Authority, after detailed deliberations, rejected the response submitted by the Licensee to the above Explanation vide Order dated December 05, 2024, recording reasons for such rejection.
The Show Cause Notice (SCN) and Explanation are issued without jurisdiction, misplaced, and contrary to applicable law. The Company’s obligations to meet the Power Purchaser’s dispatch instructions and notice to synchronize are exclusively governed by the Company’s Power Purchase Agreement (“PPA”), which provides a self-contained framework for operational issues, including remedies for any delay or failure. Regulation 4(1) of the NEPRA (Fines) Regulations, 2021, applies only to violations of the NEPRA Act, 1997, and applicable documents (license, rules, regulations, and Grid Code), not the PPA. No provision of the Act, Rules, or Grid Code has been cited that imposes obligations independent ofthe PPA in this instance.
The Power Purchaser has already penalized the Company for the alleged delayed synchronization, which is consistent with the PPA. Any additional penalty by NEPRA would constitute double punishment, contrary to law, principles of natural justice, and constitutional rights.
The delay in synchronization on January 24, 2023, resulted from an extended shutdown of nearly 100 days without dispatch from the Power Purchaser. The Company followed all required safety protocols, including preserving the Complex with higher chemical concentrations and flushing them prior to start-up consistent with prudent utility practices under the PPA, OEM recommendations and Section 1.4B of the Act. Both the Power Purchaser and NPCC have confirmed that the Company acted appropriately and that any delay was treated as a forced outage.
The Authority has not provided the Company with the comments from the Power Purchaser and System Operator as mentioned in the Order enclosed with the SCN. This omission constitutes a breach of due process, fairness, and natural justice under Regulation 4(8) of the Fines Regulations and Section 24A of the General Clauses Act, 1897. Additionally, it is noted that the Authority, while passing the Order enclosed under the SCN and issuing the SCN, has not provided the Company with an opportunity of being heard.
The Authority has gone through the submissions of the Licensee, and observes that the Licensee has provided satisfactory reply to the Show Cause Notice issued to it.
In view of the above, the Authority decides to accept the response submitted by the Licensee to the Show Cause Notice issued to it and order to close die matter in terms of Regulation 4(12) of the Fine Regulations, 2021.