ISLAMABAD: Seven independent power producers (IPPs) have proposed a reduction in electricity tariffs by up to Re0.50 per unit and a waiver of over Rs11 billion in late payment surcharges, contingent on the government discontinuing ongoing legal actions and investigations into alleged excessive profits.
In a joint request for tariff revisions submitted to the National Electric Power Regulatory Authority (Nepra), the IPPs stated that fuel and operation and maintenance (O&M) cost recoveries had already been settled. They also called for the cessation of Nepra’s suo motu actions and related inquiries.
A representative from one of the IPPs confirmed that their petition for a tariff revision was directly linked to the withdrawal of all legal cases against them. “Our request is contingent upon the closure of all cases filed against us,” the representative explained, noting that they had challenged Nepra’s notices in the Islamabad High Court.
Another representative of an IPP also demanded the discontinuation of suo motu proceedings against their company.
The Central Power Purchasing Agency (CPPA), which supports the petitions, informed Nepra that the IPPs had agreed to share future savings under fuel and O&M costs with the government, ultimately benefiting consumers. The CPPA’s Managing Director briefed the authority, stating that as part of the negotiations, the IPPs had agreed to waive over Rs11 billion in late payment surcharges.
The CPPA further noted that once Nepra approves the agreements, both the CPPA and the IPPs would withdraw their pending court cases.
Discussions during the hearing also touched on issues such as exchange rate adjustments, the ‘take-and-pay’ mechanism, and insurance caps, with the CPPA stating that agreements had been reached on these matters as well.
CPPA officials indicated that negotiations with these seven IPPs would likely lead to a reduction of up to Re0.50 per unit in electricity tariffs. They also highlighted that broader talks with multiple IPPs have already secured financial benefits totaling Rs950 billion over the lifetime of the power plants.
“To date, agreements have been reached with 29 IPPs,” CPPA officials said, emphasizing that no coercion had been involved in the agreements. “Any IPP not wishing to enter into an agreement was free to opt out. For example, Halmore Power did not sign.”
Nepra is expected to review the petitions before issuing a decision.
