\v , Central Power Purchasing Agency Guarantee 'Limited AComp311Y of Government ofPjkiShn CPPA* CPPA~G/2016/CEO/SMD/ Ii'lt86 -s 7 k ~.".},"'.z 4q 11, April 12, 2017 -~~~\~ ~ The Registrar NEPRA, _DvY(_w,:--) )~ .D'-\. It NEPRA Tower, _l-AL~) Attaturk Avenue (East) G-5/1, ~Y.," c:·c'~~ Islamabad. - SAc..~.e.::.h) v(_lrYl~E") ~ SA'-L frI (_T) · S b " f M k 0 ~R ~ ~ I P I':tA...lI"",lil=· (Y\ CJ.-l '-) SU b ject: u mission 0 ar et perator egistranon pp cation r-. (__(A>..., ) The Board of Directors of CPPA-G in its 25m meeting held on April 11, 2017 authorized CPPA-G to submit the Registration Application before NEPRA to register as the Market Operator. Thereby as authorized by the Board and in compliance to the Market Operator Registration, Standards and Procedures Rules 2015, Rule 3, Sub-Rule (2), the Applicant with its address at ENERCON building G- 5/2, Islamabad is filling the Registration Application before NEPRA to register as the Market Operator. The Registration Application has been prepared by CPPA-G keeping in view the requirements as laid down under the Rule 3, Sub-Rule (2) of the Market Operator Registration, Standards and Procedures Rules 2015. The following table maps the requirements as laid down in the rules against the contents in the Application attached with this letter: # Requirements as Per Rule 3, Sub-Rule (2) Reference in Application I Copies of memorandum of association and articles of 1 Section 1 and Appendix-Z association 2 Particulars of its Chief Executive Officer and Directors Section 2 and Annexure-1 Documents showing that satisfactory system and controls 3 Section 3 are available to conduct the market operations Documents showing that adequate financial, technical, Section 2, Section 3, Section 5, organizational and human resources are available to act as 4 Section 6, Section 7 and 8. the market operator in a proper and efficient manner on an Annexures 1,2,3,4,6 & 7 ongoing basis ~ .. ..._----- .,------------ \ Documents showing that sufficient contractual arrangements • 5 Section 4 and Annexure-5 •· are in place to conduct the market operations Already approved by the ,,:· 6 Draft commercial code ':· Authority I · 7 The fee as may be specified by the Authority Section 9 ~:I.: · ;· The Application is attached with this letter. q ?tE~ > "0· 4,) (Abid Latif Lodhi) -4..J ~ C Chief Executive Officer, CPPA-G -Distribution: Company Secretary, CPPA-G, Islamabad Master File ENERCOl'i Building G5/2, Islamabad. Phone: 051-92136]6 Fax: 05]-9213617. www.cppa.gov.pk # Contents c\CROl\"\'1IS i 1- COMPANY'S BACKGROUND AND PROFILE , ,.., ,., 1 1.1- PREAMBLE 1 1.2- CPPA-G'S TRANSITION JOURNEY 1 1.3- MEMORANDUM AND ARTICLES OF ASSOCIATION 2 - 1.4- CORPORATION DETAILS 4 -r"""~_-;.._-~PERSONNELPROFILE , , 4 2.1- PARTICULARS OF ITS DIRECTORS AND CHIEF EXECUTIVE OFFICER 4 2.2- PARTICULAR OF THE SENIOR MANAGEMENT 6 2.3- CPPA-G'S CONSULTANTS TEAM 9 3- ORGANIZATION, FUNCTIONS, SYSTEMSAND CONTROLS ,c 10 3.1- THE ORGANIZATION AND ITS RESTRUCTURING 10 3.2- CPPA-G CURRENT FUNCTIONS 11 1 3.3- EXISTING SYSTEMSAND CONTROLS 16 '4- "EXISTING CONTRACTUAL ARRANGEMENTS 19 1 "'- __ -·~.I- CONTRACTUAL FRAMEWORK 19 4.2- CONTRACTUAL ARRANGEMENTS IN PLACE 19 ] 4.3- POWER PURCHASE AGREEMENTS 22 4.4- FUTURE ACTIONS AND CONTRACTUAL FRAMEWORK 23 // POWER MARKET TRANSITION FACIUT ATION .., 25 5.1 CPPA-G'S UNDERSTANDING OF THE POWER MARKET 25 1 5.2 VARIOUS MARKETS ANALYSIS 28 5.3 TRANSITION PLAN AND THE BUSINESSPLAN 31 ] 5.4 TRANSITION AN INCLUSIVE PROCESS 31 6- BUILDING STRATEGIC PARTNERSHIPSGLOBALLY 34 6.1 EXIST THE MARKET OPERATOR / EXCHANGE OF TURKEY 34 J 6.2 MEMBERSHIPOF APEX , 35 ] 7- AN EXTREMELY PRODUCTIVE YEAR 35 8- MARKET KEY FACTS AND FIGURES FY2016 39 9- MARKET FEE 45 J 10- PRAYER 45 1 J J -. " ACRONYMS A_A,_ Administrative Agreement ADB Asian Development Bank AEDB Alternative Energy Development Board AGl\fs Annual General Meetings APEx Association of Power Exchanges BIST Istanbul Stock Exchange BoD Board of Directors BPC Bulk Power Consumer BTA Business Transfer Agreement CEO Chief Executive 0 fficer CPF Contributory Provident Fund CPPA-G Central Power Purchasing Agency Guarantee CRPEA Central Registrar and Power Exchange Administrator CTBCM Competitive Trading Bilateral Contract Market Plan CV Curriculum Vitae DA Direct Agreement DISCO Distribution Company DPC Distribution Planning Code ECC Economic Coordination Committee EMRA Energy Market Regulatory Authority, Turkey EPA Energy Purchase Agreement EPIASjEXIST Energy Exchange Istanbul- The Market Operator ERP Enterprise Resource Planning J EUAS Turkish Electricity Generation Company FBR Federal Board of Revenue FESCO Faisalabad Electric Power Company J FY Fiscal Year GENCO Generation Company GoP Government of Pakistan ] G\\'h Gigawatt hour HR Human Resource HR&i\ Human Resources and Administration .1 HSD High Speed Diesel HVRT High Voltage Ride-Through J IESCO Islamabad Electric Supply Company IPP Independent Power Producer ISO Independent System Operator J IEP Integrated Energy Plan J J IT Information Technology JD Job Description KE K-Electric KPI Key Performance Indicator LAN Local Area Network LCL\. London Court of International Arbitration LESCO Lahore Electric Power Company MoF Ministry of Finance i'vIP Market Participant I\:f\'C Mega\vatt 1 i'vf\Vh Mega\vatt hour j\f\\T-' Ministry of \\"ater and Power MYT Multi-Year Tariff NEPRA. National Electric Power Regulatory A.uthority NPCC National Power Control Center NTDCL National Transmission and Dispatch Company Limited PC Planning Code PEIvIO Pakistan Electricity Market Operator PESCO Peshawar Electric Supply Company PJM Regional transmission organization, US 1 .J PMP Project Management Professional P}'IS Performance Management System PMS Power Market Survey J PPA Power Purchase Agreement PPAA Power Procurement Agency Agreement J PPIB Private Power & Infrastructure Board RFO Residual Fuel Oil R-LNG Re-gasified Liquid Natural Gas J RMS Revenue Metering System RTO Regional Transmission Organization SAN Storage Area Network SCADA Supervisory Control and Data Acquisition SECP Securities and Exchange Commission of Pakistan _j SFS System for Settlement SO System Operator TDS Tariff Differential Subsidy J TEAS Turkish Electricity Generation and Transmission TEC Turkish Electricity Corporation TETAS Turkish Electricity Trading and Contracting Company J TEDAS Turkish Electricity Distribution Company J ii J TNO Transmission Network Operator T\,('h T erawatt Hour U.K United Kingdom U.S United States USAID United States Agency for International Development WAN \'(hde Area Network \VAPDA \'Vater and Power Development Authority ZVRT Zero V oltage Ride-Through 1 J J ] J J J .J j J J iii J Market Operator Registration Application 1- COMPANY'S BACKGROUND AND PROFILE 1 1.1- PREAMBLE Central Power Purchasing Agenc~' (Guarantee) Limited CCPP"-\',) (the "Applicant" or the "Company") is a company incorporated under the Companies Ordinance 1984 (XLVII of 198-1-) and granted a Corporate Universal Identification No. 0068608 by the Security Exchange Commission of Pakistan. The Applicant 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. The National Electric Power Regulatory Authority ("NEPR,-\"), with the approval of the Federal Government and in exercise of the po\vers conferred by section 46 of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 has promulgated the National Electric Power Regulatory Authority (Marker Operator Registration, Standards and Procedure) Rules, 2015 (the "Rules"). As per Rule 3 of these 1 Rules, NEPR,-\ is the body empowered to register an entity as market operator and authorize the same to conduct the market operations. Thus, if an entity desirous of being registered as a market operator submits its application for the same and satisfies the eligibility criteria set forth in Rule 3(2), NEPRA is empowered to register such en tiry as the market operator and authorize it to conduct the market J 0peratlons Further, as per Rule 5 of the Market Rules, CPPA-G shall be deemed to be authorized and J registered as the market operator. Thus, for a period of 1:\,/0years from the commencement of the Rules CPPA-G has, by operation of Rule 5, been deemed to be the market operator 1 and authorized and registered to conduct the market operations for this period. J Therefore, in view of above and in compliance to Rule 3, Sub-Rule (2) of the Rules, the Applicant with its address at ENERCON building G-S/2, Islamabad is filling the J Registration Application before NEPR,A,. to register as market operator. The registration application requirements as per Rule 3, Sub-Rule (2) are reproduced at Appendix-1 for J reference. 1.2- CPPA-G'S TRANSITION JOURNEY As elaborated under section 1.1 above, CPPA-G is a non-profit independent company established under the Companies Ordinance, 1984. Initially, it was a part of NTDC and performed its functions as a department of the organization and was located at \,(,APDA House, Lahore. Its major functions included billing and settlement, treasury and it worked J as an agent for p0\,ver procurement on behalf of DISCOs including the import of power from other countries. J J 1 _j Market Operator Registration Application Considering the importance of an independent Market Operator role and the need to develop competitive power market, on direction of Government of Pakistan (GoP), the NTDC's transmission license was bifurcated. The Market Operator role was transferred from CPPA of NTDC to CPP_A..-Gin mid of 2015 under the Business Transfer Agreement (BTA) between NTDC and CPPi\-G. Thereby, NTDC as per the amended transmission license now performs the roles of Transmission Network Operator (TNO) and System Operator (SO).