Day: August 6, 2024

Government to Retire Expensive Power Plants to Lower Electricity Prices

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Power-generation

ISLAMABAD: The federal government has announced plans to retire costly power plants in a bid to reduce electricity prices nationwide. This decision was conveyed by senior officials from the Power Division during a meeting with a delegation from Muttahida Qaumi Movement (Pakistan) on Monday. The discussions focused on electricity issues in Karachi and Hyderabad, and the capacity payments to Independent Power Producers (IPPs). The MQM (Pakistan) leadership has been vocal about the poor service delivery and inflated billing by K-Electric and Hyderabad Electric Supply Company. MQM’s Member National Assembly, Mustafa…

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Chamber of Commerce and Industry Challenges IPP Deals in Supreme Court

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Power genration

ISLAMABAD: The Chamber of Commerce and Industry has filed a constitutional petition in the Supreme Court against independent power producers (IPPs), seeking to nullify the 1994, 2002, and 2015 policies that allowed state largesse disposal without competitive bidding. Filed by Advocate Faisal Naqvi, the petition urges the Supreme Court to declare that the government and its agencies cannot profit from providing essential services like electricity. It calls for a comprehensive forensic audit of all IPPs and the implementation of the 2020 report to recover excess profits, renegotiate agreements, and shift…

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Global Firms to Review IPP Deals as Government Seeks to Cut Capacity Payments

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IPPs-new

ISLAMABAD: Amid mounting criticism of independent power producers (IPPs), Prime Minister Shehbaz Sharif has established a task force to engage international firms in reviewing IPP agreements and proposing measures to reduce capacity payments. Currently, electricity consumers are burdened with over Rs2.2 trillion in capacity charges, including payments to non-operational IPPs. Consumers pay Rs9 per unit to active plants but a staggering Rs18 per unit to plants that generate no electricity, amounting to 70% of the total electricity generation cost. Sources told The Express Tribune that the task force will recommend…

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Government to Cut Returns and Boost Investments to Lower Power Tariffs

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Power-sector

ISLAMABAD: In response to growing concerns over unaffordable energy tariffs, the government is planning to reduce the return on equity (ROE) for its power plants and offer improved prices to attract more investments in hydrocarbon exploration and development. Sources informed Dawn that the government has decided to scale down the ROE for public sector power projects, including hydropower. With many ongoing projects’ financials tied to local and international debt, various financial models are under consideration. The trade-off between revising returns on government equity and potential impacts on the budget or…

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