Govt pays Rs134bn to clear dues of IPPs

NEPRA reserves verdict over hike in electricity tariff for October

ISLAMABAD: The Central Power Purchasing Agency on Tuesday informed the National Electric Power Regulatory Authority (NEPRA) that the government has made a payment of Rs134 billion to Independent Power Producers (IPPs) during the past few days.

CPPA officials made this disclosure during a public hearing on fuel charges adjustment (FCA) of October 2021, after officials of NEPRA raised questions about how much the government had recently paid to clear the dues of IPPs.

The federal cabinet’s Economic Coordination Committee (ECC) had earlier approved the payment of the second installment worth Rs134.7 billion to IPPs in addition to the transfer of funds from subsidies.

The government had already made the first payment under an agreement by diverting funds from subsidies and grants, releasing Rs58.2 billion to the Power Division to make the payment onward to IPPs under the Power Policy 2002. Out of this fund, the Power Division had paid Rs52.4 billion to IPPs, accounting for 40 per cent of the dues while it paid Rs5.8 billion to TNB Liberty Power Limited.

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It is pertinent to mention here that  a public hearing was held at NEPRA on Tuesday to take a decision regarding CCPA’s plea to approve a Rs4.75 per unit increase in the power tariff for October under the monthly Fuel Charges Adjustment (FCA) mechanism. However, the authority reserved its judgment over the matter.

According to the petition, the actual cost of power generation was at Rs9.926 per unit against the reference fuel charges of Rs5.1733 per unit during October.

Based on the information provided by the CPPA to NEPRA, power generation through hydel sources during October stood at 23.26 per cent, coal at 16.69pc, high speed diesel (HSD) 0.51pc, RFO 10.88pc, gas 9.67pc, Re-gasified Liquefied Natural Gas (RLNG) 23.93pc, nuclear 12.33pc, and 1.64pc through wind.

Similarly, a total of 11,296.23 Gigawatt per hour (GWh) energy was generated while net energy delivered to DISCOs equaled 10,982.86 GWh during the month under review.

According to sources, after the necessary scrutiny of documents as well as verification of facts and figures, the authority will announce its decision which is likely to be a go ahead. If so, the move that will add an additional burden of approximately Rs60 billion on power consumers while the impact of the proposed increase will be passed on all categories of consumers except lifeline ones.

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Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected]

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