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CCP welcomes NEPRA’s decision to maintain net metering regulations

The Competition Commission of Pakistan (CCP) has welcomed the decision of the National Electric Power Regulatory Authority (NEPRA) to maintain the existing NEPRA (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulation, 2015. 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 decrease in the amount payable to distributed generators/ prosumers (consumers/customers who both produce and consumes electricity). CCP had reservations over the proposed amendments and conveyed its concerns to NEPRA in Nov 2022. NEPRA assured to give due consideration to all stakeholders’ views before reaching a decision on the proposed amendments.

The Competition Act, 2010, mandates CCP to review policy frameworks for promoting competition and making suitable recommendations for amendments to any law affecting competition in Pakistan to the government. CCP noted that the proposed amendments would have been detrimental to the distributed generators/prosumers, who made investments in solar systems based on policy provisions, agreement with their respective DISCOs, and a license from NEPRA.

After receiving concerns from various sources, 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, rising international oil prices, inefficiencies in DISCOs, limited fiscal space, and global renewable energy efforts contradict NEPRA’s proposed amendments. NEPRA in its decision dated Feb 10, 2023, has recognized the advantages of net metering, including displacement of expensive electricity, savings in foreign exchange, and minimal losses.

The proposed amendments would have also placed distributed generators/ prosumers at a disadvantage compared to other generation companies and IPPs. Moreover, DISCOs would have purchased electricity units from distributed generators at Rs. 9/kWh (existing rate is 19.32kWh) and sold them back to end consumers on the grid at a significant mark-up. However, NEPRA’s recent decision would result in equal treatment of all players in the sector.

CCP supports NEPRA’S decision and looks forward to continued collaboration to promote competition, fair play, and equal treatment for all the players in the sector.

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