ICCC clarifies issuing ‘electricity generation licence’ to NiuPower

Business

The Independent Consumer and Competition Commission (ICCC) issued an Electricity Generation Licence to NiuPower Ltd on Oct 8 and not a Distribution License as reported in The National on Friday, Oct 11.
ICCC commissioner and chief executive officer Paulus Ain said this in response to a media release made by Kumul Petroleum Holdings Ltd in the newspaper entitled “Kumul Petroleum gets power project license”.
“The generation license now effectively authorises NiuPower to only supply power and not provide transmission, distribute and retail services unless it is issued with the respective licenses for these services from the ICCC,” Ain said.
He said since the development of the Third Party Access Code (TPA Code), the number of Independent Power Producers (IPPs) interested in participating in the electricity industry had increased over the years.
“IPPs who wish to supply bulk power to PNG Power (PPL) must have a PPA (power purchase agreement) with them. For new or prospecting IPPs, a PPA including the wholesale power price must be approved first by PPL and then submitted to the ICCC for final endorsement.
“IPPs should avoid entering into Engineering and Procurement Contracts prior to having an approved PPA with PPL and the ICCC.”
Ain said any IPP that wished to generate and supply bulk power was required to comply with established procedures outlined below in order to get its PPA approved and apply for the respective electricity license.

  • The IPP has to have a memorandum of agreement or memorandum of understanding with PPL, which sets out the necessary capacity requirements and project identification details;
  • the IPP and PPL are required to have a draft PPA setting out the commercial and technical requirements including a proposed power purchase price;
  • the draft PPA has to be submitted in accordance with the requirements under the TPA Code and the Grid Code to the ICCC for review and approval against the Power Purchase Reference Price as determined for the three main power grids in PNG;
  • once the PPA is approved by the ICCC consistent with the ICCC determined reference price; the IPP and PPL then proceed to sign the PPA;
  • the approved PPA together with the licence application must be submitted to the ICCC for an independent assessment on both the technical and economic aspects of the project. The ICCC shall conduct its review and assessment in accordance with the TPA and Grid Codes requirements. ICCC will give final approval to the PPA once it meets all the requirements and most importantly if the wholesale price is below or equal to the set Reference Price(s); and,
  • Once the ICCC grants approval of the PPA, the IPP can then apply to the ICCC for an electricity undertaker’s generation licence to supply electricity to PPL.