CPPA plea to reduce tariff for electricity purchased from sugar mills rejected by Nepra

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ISLAMABAD: A Central Power Purchasing Agency (CPPA) plea to reduce tariff for electricity purchased from sugar mills has been rejected by National Electric Power Regulatory Authority (Nepra) on Wednesday.

The request was filed by CPPA on behalf of the federal government and the rejection by the power regulator means it would be compelled to buy electricity at higher rates from sugar mills, reported Express Tribune.

Nepra’s rejection of CPPA’s plea means this would benefit influential sugar mill barons as their earnings would rise by Rs48 billion via production and sale of bagasse-based power over a period of next ten years.

Previously, the power regulator had set a rate of Rs12.09 per unit for 390 megawatt-based bagasse power plants. The new tariff reached by Nepra of Rs8.86 per unit is not applicable in this case.

CPPA had in its plea highlighted that before the expiry of the upfront tariff of 2013, the power regulator had started the process of ascertaining an upfront tariff for 2017, which was at a reduced rate than what was originally set in 2013.

It requested the power regulator to revoke the permission for collecting the higher tariff and highlighted present CPPA-Guarantee arrangements under the existing Power Policy Generation 2015 included re-gasified LNG power plants, local mine-mouth coal power plants and imported coal-based power plants.

CPPA said electricity purchase on priority from bagasse co-generation projects would contribute to the relegation of power supplies from efficient and cheap conventional sources of energy generation, which could affect basket prices.

Previously, these sugar millers had reached an agreement with the then ministry of water and power to sell electricity at the new tariff of Rs8.86 per unit.

Following this, the ministry published a power acquisition request to these sugar millers.