Central Power Purchasing
Agency (Guarantee) Limited (CPPA-G) is a company incorporated under the
Companies Ordinance 1984 (XLVII of 1984) and granted a Corporate Universal
Identification No. 0068608 by the Security Exchange Commission of Pakistan. The
company was incorporated in the year 2009 after its segregation from National
Transmission and Dispatch Company (NTDC), however it continued its operations
under NTDC (as department of NTDC) till June 2015, when a separate entity was
made operational.
COMPANY’s REGISTRATION
As per Rule 5 of the Market Rules, CPPA-G shall be deemed to be
authorized and registered as the market operator. Thus, for a period of two
years from the commencement of the Rules CPPA-G has, by operation of Rule 5,
been deemed to be the market operator and authorized and registered to conduct
the market operations for this period.
Therefore, in view of
above and in compliance to Rule 3, Sub-Rule (2) of the Rules, CPPA is in the
process of filling Registration Application before NEPRA to register as market
operator.
BACKGROUND
Pakistan initiated power sector reform
In the 1990s with the restructuring of WAPDA, the enactment of NEPRA Act and
the operationalization of the electricity regulator (NEPRA). By 2002-2005,
WAPDA successor companies had been created and licensed, thus separating
transmission, generation, and distribution and retail supply into different
companies. WAPDA became a power company dedicate to hydropower, and no longer
responsible or with the right to procure power.
A regulatory framework was developed,
and NTDC licensed in 2002 with two functions in addition to transmission and
system operation functions. These functions, assigned in the license as
transitory arrangements to reflect the change in sector structure and future
power market, were: (i) development and implementation of competitive
electricity markets, including a contract registrar; and (ii) as WAPDA could no
longer be the Buyer in PPAs with new generation, procure power on behalf of the
distribution companies created in the restructuring of WAPDA (DISCOs) until the
wholesale competition market started commercial operation (expected by 2009,
and no later than 2012) when DISCOs would contract and procure power on their
own. In this way the CPPA function in NTDC License introduced a change in the
power purchase and market model, where each and all DISCOs buy power through a
representative that is responsible to negotiate, sign, and administer the
billing and settlement of PPAs.
Consistent
with the expected market development, in 2009 CPPA G was created as a power
company to take over the CPPA and market development functions from NTDC as
expected in 2002 NTDC License. The commercial operation of CPPA-G started in
mid of 2015 when the transfer of functions were formalized and completed
between NTDC and CPPA-G. The function and scope of authority of CPPA G are
regulated by NEPRA Market Operator Rules.