ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved the annual \$250 per megawatt (MW) fee levied by the Private Power and Infrastructure Board (PPIB) as a pass-through charge in electricity tariffs, allowing Independent Power Producers (IPPs) to recover the cost from consumers.
In its decision issued Monday, Nepra ruled that the fee — long contested by industrial and renewable energy stakeholders — is legal, justified, and consistent with the PPIB Act. The regulator concluded that PPIB plays a continuing statutory role even after the commercial operation date (COD) of projects, including handling government guarantees, dispute resolution, and compliance oversight.
While backing the legitimacy of the fee, Nepra advised PPIB to rationalise the amount and shift it from a dollar-based to a rupee-denominated model to avoid passing on foreign exchange risks to end-users. Currently, the fee’s impact on consumers is estimated at Rs0.01175 per kilowatt-hour (kWh).
The fee — which does not apply to K-Electric or its customers — supports PPIB’s operations following its merger with the Alternative Energy Development Board (AEDB) and eliminates reliance on government funding.
However, the decision has triggered criticism from stakeholders such as the Pakistan Association of Large Steel Producers (PALSP) and renewable energy firms, who argue that PPIB’s involvement post-COD is limited and does not warrant a dollar-indexed fee.
Renewable players like Atlas Solar urged for a reduced, PKR-based fee tailored to renewable projects, citing their distinct tariff structures and lower capacity utilization compared to thermal IPPs.
Nepra clarified that the decision does not amend existing Power Purchase Agreements (PPAs), and the fee can be incorporated through existing tariff mechanisms or regulatory directives, even if not explicitly stated in the contracts.
Story by Israr khan
