ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) voiced serious concerns on Thursday regarding factors in ongoing negotiations with Independent Power Producers (IPPs) that could deter investment in Pakistan’s power sector. These issues surfaced during a public hearing on K-Electric’s provisional Fuel Charges Adjustment (FCA) for September 2024, where K-Electric proposed a 16 paisa per unit reduction, aiming to return Rs 247 million to consumers along with General Sales Tax.
During the hearing, NEPRA Member (Tariff and Finance) Mathar Niaz Rana received commendation for his dissenting note on K-Electric’s generation tariff. Participants also discussed the recent termination of contracts with five IPPs and the ongoing renegotiation of others, led by the Energy Task Force under Minister for Power Sardar Awais Khan Leghari, with inputs from NEPRA, CPPA-G, SECP, and PPIB officials.
Members Amina Ahmed (Law) and Rafique Ahmad Shaikh (Technical) raised concerns about the absence of a clear government policy for IPP contracts. “The lack of a defined approach is unsettling,” remarked Ahmed, while Shaikh warned against actions that might deter private sector investment.
Political representatives, such as Imran Shahid from Jamaat-e-Islami, clashed with NEPRA officials, with Shahid alleging NEPRA’s favoritism towards K-Electric, to the detriment of consumers. Expressing frustration over the contentious tone, Shaikh proposed restricting discussions to business community representatives. “There is a process to file a review if one doubts our decisions,” he asserted.
Key stakeholders highlighted pressing issues: interveners noted that K-Electric’s generation was costlier than grid-supplied power in September, and representatives from the Karachi Chamber of Commerce urged K-Electric to adopt renewable energy to reduce tariffs. K-Electric’s Director of Finance, Ayaz Jaffer, attributed high fuel costs to limited access to local gas, suggesting a reduction in costs if local gas were made available. Jaffer noted that K-Electric’s output declined by 6% in September 2024, largely due to economic challenges, though a winter package is expected to stimulate power demand.
The session concluded with NEPRA directing K-Electric to provide detailed responses to all queries raised by interveners.
Story by Mushtaq Ghumman
