Operational failures draw Regulator’s ire: Nepra imposes fines of Rs 50 million on CPPA-G, NGC

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has imposed a fine of Rs 25 million on the Central Power Purchasing Agency–Guaranteed (CPPA-G) and National Grid Company (NGC) each for flouting NEPRA’s Regulations.
According to details shared by NEPRA, a countrywide power system collapse occurred on January 1, 2021, plunging the entire nation into darkness. The system was fully restored on January 10, 2023 after nearly 20 hours of outage. NEPRA took serious notice of the incident and constituted an Inquiry Committee (IC), which submitted a comprehensive report. Based on its findings, NEPRA initiated legal proceedings against several power plants for failing to submit mandatory Operating Procedure manuals as required under Rule 16(1) of the NEPRA Licensing (Generation) Rules, 2000.
Explanations and later Show Cause Notices were issued to the concerned plants. Hearings were held on September 6, 7, and 8, 2022, attended by representatives of the National Power Control Centre (NPCC), the System Operator, and CPPA-G. Several plants argued that they had already submitted draft OPs to NPCC and CPPA-G, but these had not been signed. NEPRA subsequently directed NPCC and CPPA-G to finalize all OPs in coordination with stakeholders, and to sign Black Start Procedures with plants equipped with the relevant facilities, including Orient Power, Sapphire Electric, Halmore Power, Engro Powergen Qadirpur, Rousch Power, and Foundation Power, within one month. The directives, however, were not complied with.
During a public hearing on February 28, 2023, regarding the Fuel Charges Adjustment (FCA) for DISCOs, NEPRA again noted the lack of progress. A joint professional-level meeting between NEPRA, NPCC, and CPPA-G was held on March 10, 2023, during which compliance was reiterated. NPCC and CPPA-G were formally instructed on March 22, 2023, to submit a concrete plan with timelines for finalizing OPs and activating the available Black Start facilities.
NEPRA later observed with concern that neither the OPs nor the Black Start Procedures had been finalized despite significant time having passed. The Authority found CPPA-G in prima facie violation of Section 48 of the NEPRA Act for failing to comply with its repeated directives, and accordingly initiated proceedings under the NEPRA (Fine) Regulations, 2021.
CPPA-G submitted its response on December 29, 2023, but the Authority rejected the explanation after detailed deliberations. A Show Cause Notice dated October 11, 2024, was then issued, following an earlier explanation sent on December 12, 2023.
In its reply, CPPA-G argued that compliance with Rule 16(1) of the NEPRA Licensing (Generation) Rules, 2000, falls primarily on the Generation Licensees, and that OPs under Power Purchase Agreements (PPAs) differ in scope. CPPA-G also pointed to changes in NPCC’s list of plants requiring Black Start capability, noting that the revised list issued on March 27, 2023, focused on plants near load centres to facilitate faster system restoration.
However, NEPRA noted that only 75 out of 112 OPs (around 67 percent) have been finalized, leaving over one-third incomplete—an unacceptable compliance gap given that OPs are mandatory under both PPAs and generation licences. The Authority also highlighted that CPPA-G admitted to pending OPs in at least 17 cases despite agreement on Technical Limits.
NEPRA rejected CPPA-G’s justification that no dispute notices had been initiated under the PPA, noting that the absence of formal dispute proceedings does not absolve the Licensee from proactively resolving issues. The Authority also pointed out that delays in settling Technical Limits for certain coal plants—Thar Coal Block-I, Thar Energy Limited, and ThalNova Power—were being wrongly attributed to NEPRA, even though the underlying disputes fall under PPA jurisdiction and should have been resolved between CPPA-G, NTDC, and plant operators.
CPPA-G reported that OPs had been signed with Tarbela, Mangla, Tarbela 4th Extension, Warsak, Golen Gol, and Gomal Zam, but NEPRA noted the absence of identified disputes for remaining WAPDA hydropower stations, indicating internal inefficiencies.
After reviewing all submissions and the available record, NEPRA concluded that CPPA-G violated section 48 of the NEPRA Act and applicable regulations by failing to finalize OPs and sign Black Start Procedures despite repeated directives. Consequently, a fine of Rs 25 million has been imposed.
CPPA-G has been ordered to deposit the amount within 15 days in the designated NEPRA bank account and submit proof of payment to the Registrar. Failure to do so will result in recovery under Section 41 of the NEPRA Act and the Fine Regulations, 2021, as arrears of land revenue.
Regarding NGC, the Authority considered the submission of the Licensee regarding the updated progress on finalization of power plants* OPs and observed that, out of 117 OPs, 73 (-62%) have been signed, 26 (-22%) are under review, 15 (-13%) have not yet been initiated, and 3 (-3%) are pending owing to non-finalization of technical schedules. However, the Authority notes with concern that more than one-third of the power plants still do not have finalized OPs despite the contractual and regulatory obligations under the PPA and die NEPRA Licensing (Generation) Rules, 2000.
Furthermore, the Licensee submitted that the responsibility for finalization of OPs under the PPA lies with the Parties, i.e., the Purchaser (CPPA-G) and the Power Plant. Being one of the six members of the Operating Committee (OC), the Licensee stated that it has no means to bind any power plant to compliance. The Authority has examined the aforesaid submissions and observed that certain disputed items of technical nature, which fell under the purview of the Licensee, are also hindering the process of finalization of OPs. Nevertheless, it is pertinent to note that the PPA provides a comprehensive mechanism for finalization of OPs, and in case of any dispute, it prescribes a process for resolution through “Resolution by Parties,” “Determination by Expert,” and “Arbitration,” respectively.
Keeping in view the relevant provisions of the NEPRA Act, other applicable documents, Licensee’s submissions and available record, the Authority is of the considered opinion that the Licensee has failed to comply with Section 48 of the NEPRA Act and, accordingly, declares the Licensee as delinquent in terms of Regulation 4(13) of the Fine Regulations, 2021. Consequently, the Authority has imposed a fine of Rs 25 million on the licensee.
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