Govt renegotiates contracts with 8 More IPPs to reduce electricity costs

The government has renegotiated contracts with eight additional independent power producers (IPPs), aiming to lower electricity tariffs, particularly for consumers using over 200 units of electricity, the National Assembly was informed on Friday. 

Information Minister Attaullah Tarar announced that power purchase agreements with five IPPs have been terminated, resulting in billions of rupees saved through reduced capacity payments.

He highlighted that the recent reduction of 86 paisas per unit in fuel cost adjustment by the National Electric Power Regulatory Authority (Nepra) underscores the government’s commitment to bringing down electricity costs for consumers. 

Tarar also noted that the federal government allocated Rs50 billion in subsidies for consumers using between 1 and 200 units from July to September, with the Punjab government contributing Rs45 billion for those using 201 to 500 units.

Additionally, an annual subsidy of Rs276 billion has been set for consumers using up to 300 units, along with Rs174 billion dedicated to K-Electric consumers. 

The minister expressed optimism for further reductions in power tariffs, citing the ongoing work of the Prime Minister’s Task Force on IPPs.

Tarar also pointed to positive economic indicators, including $8.8 billion in remittances, lower inflation, a reduced interest rate, rising exports, and growing foreign exchange reserves, as part of the government’s broader efforts to stabilize the economy.