ISLAMABAD: To ensure transparency in the investment plans of all electricity distribution companies (DISCOs), National Electric Power Regulatory Authority (NEPRA) is all set to bound the power companies to get regulator’s approval prior to any investment in the future.

In this regard NEPRA has devised new rules with aim to give greater clarity, transparency and consistency to the investment verification policies and practices of the Authority and also to give effect to the role investment to play in meeting the challenges of power sector.

These rules will additionally set out the criteria and conditions for approval applied by the Authority in determining which investments would qualify for a return on investment. Third party funded assets will not be considered in the investment plans or supplementary approvals, NEPRA said.

A copy of draft of Investment Standards and Procedures (Transmission and Distribution) rules 2014 prepared by NEPRA disclosed to Daily Times the licensee DISCOs would submit a petition to Registrar NEPRA for obtaining prior approval of the Authority for schemes involving major investments as per the procedure as laid down in these rules and demonstrate to the satisfaction of the Authority.

Also a power company if interested to invest will submit its investment plan to the Authority ten months prior to the commencement of the respective financial year.

State the need for the major investment in the transmission and/or distribution system, which the licensee proposes to undertake. The licensee shall submit investments for monitoring and verification within thirty days of the end of every financial year. The licensee would not undertake an investment unless approved by the Authority, according to devised rules.

Similarly, at the time of admission of petition, Authority will also determine whether a hearing is required to arrive at a just and informed decision. For the purposes of making such an order, Authority may administer discoveries and interrogatories to any person, make information directions or require the appearance of any person.

Besides, Regulatory in newly drafted rules declared decision of the Authority in respect of the licensee’s investment plan would be communicated within ninety days of the date of submission of the complete information of investment plan.

Within ten days of service of a final order, determination or decision of the Authority, a party may file a motion for leave for review by the full strength of the Authority of such final order, determination or decision, as the case may be, NEPRA’s draft added.

Under the proposed rules, a final decision given by the Authority would be intimated to the federal government as soon as may be but in any event not later than three days after the date of such final decision for the purpose of notification thereof in the official Gazette under sub-section (4) of section 31 of the Act. While, ‘where a licensee fails to comply with the provisions of these Rules as prescribed in the provisions above, Authority may, in addition to exercising its powers set out in the Act and applicable documents disallow investments made by the licensee in its investment petition.’

Also any licensee who contravenes any of these Rules would be punishable with fines which may extend to Rs one million and in the case of a continuing contravention with an additional fine which may extend to Rs 500,000 for every day during which such contravention contuse after the first contravention, NEPRA document said. According to the proposed rules, Authority would, while considering the investment petition filed by the licensee and while taking any decision, taking into account the licensees’ investments in transmission and/or distribution system shall be reasonable, non-discriminatory and promote the security and reliability of supply. The sequencing of investments by a Licensee would be technically and financially feasible and sustainable and shall be consistent with the upcoming generation plan. Also, investment plans would include sufficient detail to allow effective monitoring by the Authority. The plan would be consistent with the Act and applicable documents.

Draft further revealed Authority while examining the contents, submitted by the licensee would analysed ‘current assessment of the licensees network, the magnitude and time line for construction, expansion, rehabilitation, augmentation, reinforcements, installation, up gradation or extension of a Network Asset, quality of supply improvements to be achieved by the proposed investments in compliance with the performance standards and projected network growth, coverage and access to electricity. The draft said financing plan and capital expenditure were required to achieve the proposed investments. It said the licensee would give detailed operation and maintenance likely to be incurred in respect of the proposed investment, justification of technical and financial sequencing while targets and calculated direct benefits to be achieved and accruing to consumers by the proposed investments an would also be submitted to Authority.