Independent Power Producers
The government has announced a significant decision to review and terminate contracts with 15 independent power producers (IPPs) in a move aimed at alleviating the public’s burden of high electricity costs, according to a report.
This initiative is part of a broader effort to reform the energy sector and bring relief to consumers affected by soaring electricity prices.
In response to mounting pressure and the need for economic adjustments, the government has established a task force to oversee this process.
The task force has finalized a framework to manage the termination of these contracts, signaling a major shift in the country’s energy policies.
The termination will occur in two phases. Immediately, the government plans to cancel contracts with six IPPs that were established in the 1990s.
These companies include Gul Ahmed Energy Limited, Kohinoor Energy, Liberty Power Project, Tapal Energy Limited, Attock Generation, and KAPCO. The agreements with these companies will not be extended beyond their current terms.
Additionally, the government will phase out contracts with nine other IPPs over the next three to five years.
This gradual termination will affect companies such as Lal Pir, Pakgen, Fauji Kabirwala Power, Habibullah Coastal, Japan Power Generation, Saba Power, HUBCO, Southern Electric Power, and Rousch Power.
The phased approach aims to mitigate disruptions in power supply while transitioning to new energy policies.
The decision to review these contracts is driven by a desire to address the high electricity costs that have been impacting consumers.
The government is also considering changes to the billing policy for consumers using more than 201 units of electricity.
Under the new framework, special slabs will be introduced, and a rate of Rs26 per unit is being contemplated for this higher consumption bracket.
Federal Minister Awais Leghari emphasized the importance of these reforms, stating that the energy sector plays a crucial role in the economy.
He highlighted the need for effective coordination to implement these reforms and ensure their success.
The National Task Force will be responsible for executing the 20-point reform agenda, which has already been set in motion.
Leghari assured that the government is committed to enacting these changes and ensuring that the reforms lead to tangible benefits for consumers.
The move is expected to contribute to a more sustainable and economically viable energy sector, ultimately providing relief to the public.
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