ISLAMABAD: The Islamabad High Court (IHC) has suspended National Electric Power Regulatory Authority’s suo moto notice to residual fuel oil (RFO)-based Independent Power Producers (IPPs), including Liberty Power Tech Limited, Atlas Power Limited, Attock Gen Limited and Nishat Power Limited, with regard to alleged excessive profits.
These IPPs were established under the Policy for Power Generation Projects, 2002, after the execution of an implementation agreement with the government and a power purchase agreement with the National Transmission and Dispatch Company.
Under the provision of both agreements, IPPs were issued sovereign guarantees, assuring their demands of capacity prices based on tariffs determined by NEPRA under the NEPRA Act 1997.
Since the government defaulted in paying the IPPs’ capacity demands, the sovereign guarantees were invoked and arbitration proceedings were initiated. The suo moto notice issued by NEPRA is not covered under the provisions of the NEPRA Act 1997 or any substantive law and is considered by IPPs to be an illegal and adverse tactic to renegotiate tariffs which have already been finalised.
The IHC suspended NEPRA’s notice till the next hearing of the petition.