Nepra walks back Rs42bn penalties on National Transmission and Dispatch Company

The NTDC had been pleading for years that deductions of about Rs42bn from its dues were hampering the completion of nationally important infrastructure projects. The regulator, meanwhile, had been penalising the company over delays in removing system constraints and had dedu­cted amounts from NTDC’s Use of System Charges payable by distribution companies. The matter was later taken to the Islamabad High Court (IHC), which initially stayed the deduction of NTDC dues as directed by Nepra and then ref­e­rred the issue back to the regulator for a decision on merit. On re-examination, and based on NTDC’s viewpoint, Nepra concluded that its earlier decision was not fully supported by the legal and regulatory framework. It therefore reversed the decision that had remained in force for over three years, during which NTDC’s dues of Rs41.44bn remained withheld. “The Authority is of the considered view that continuation of the practice of withholding financial impact based on EMO violation does not fully align with the intent of the regulatory framework,” Nepra said in its decision. It said it was cognisant of avoidable costs borne by consumers due to delayed removal of constraints, but considered that these issues were more appropriately addressed through targeted enforcement, performance monitoring and compliance mechanisms, rather than through continued withholding of financial impact in fuel cost adjustment (FCA) proceedings. Nepra therefore decided that “the practice