Business Recorder
ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has warned the National Grid Company (NGC)—formerly NTDC—of strict action for failing to comply with its directions in the case related to an unprecedented Fuel Charges Adjustment (FCA) for January 2024. In January 2024, CPPA-G claimed an FCA of Rs 7.1308 per kWh against an actual pooled fuel cost of Rs 14.602 per kWh—nearly double the reference fuel cost of Rs 7.4894 per kWh determined by the Authority in its July 14, 2023 decision for FY2024-25. The sharp deviation raised serious concerns among stakeholders and was discussed during a public hearing held on February 23, 2024. Following the anomaly, the Authority, under Section 27-A of the NEPRA Act, constituted a five-member investigation committee on March 6, 2024, comprising officials from its Monitoring & Enforcement, Tariff, Legal, and Technical departments. READ MORE: Rules violation: Nepra fines CPPA-G & NGC Rs25m each The committee identified multiple critical lapses by NGC. It found that the company failed to expand the transmission grid in line with the growing share of cheaper southern generation sources—such as local coal, nuclear, and wind—leading to their persistent underutilisation and forcing reliance on expensive RFO- and HSD-based thermal plants in the north. The Matiari-Lahore HVDC transmission line, with a capacity of 4,000 MW, was able to transfer only around 2,800 MW due to the non-completion of the 500 kV Lahore North Grid Station—highlighting inadequate downstream planning. The report further revealed that approximately 852 GWh of electricity was generated from expensive fuel sources in January 2024, causing financial losses amounting to billions of rupees, while cheaper generation remained idle due to transmission constraints. It also pointed to the curtailment of wind power in the southern corridor, largely due to weak VRE forecasting and transmission limitations. This resulted in Non-Project Missed Volume (NPMV) claims of about Rs 4.4 billion. NGC’s wind forecasting error (MAPE) reached 15 percent—far exceeding the 3 percent limit prescribed under the Grid Code. The committee also noted serious compliance failures, including the non-submission of the Annual System Reliability Assessment and Improvement Report (ASRAIR) for 2022 and 2023, failure to provide plant-wise wind curtailment data and cost-benefit analysis, and non-publication of reliability studies and outage schedules. It also highlighted the absence of a real-time operational transparency portal, all in violation of the NEPRA Act and Grid Code provisions. The investigation concluded that these deficiencies were systemic and foreseeable, and should have been addressed through proper planning. Based on these findings, NEPRA issued a show-cause notice to NGC under the NEPRA (Fine) Regulations, 2021. NGC, in its response, denied the allegations, terming them a misinterpretation of facts. It argued that the high FCA resulted from factors beyond its control, including low winter demand, load shedding, and voltage instability, which necessitated continued operation of expensive plants to avoid blackouts. It maintained that its demand forecast error of 2.2 percent was negligible. NGC acknowledged delays in the Lahore North Grid Station, attributing them to land acquisition issues, court stay orders, and contractor failures. It stated that efforts, including fresh bidding and engagement with the Asian Development Bank (ADB), were underway to expedite the project. Copyright Business Recorder, 2026
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