KAPCO Seeks Nepra Clarification to Ensure Tariff Continuity and Grid Stability

New-KAPCO

ISLAMABAD: The Kot Addu Power Company Limited (KAPCO) has formally requested the National Electric Power Regulatory Authority (Nepra) to clarify and rectify its recent tariff order, emphasizing the need for regulatory consistency and system reliability. The company warned that uncertainty regarding its tariff validity could jeopardize grid stability in southern Punjab, according to sources in Nepra.

In a letter to Nepra Chairman, KAPCO Chief Executive Officer Shahab Qader Khan sought explicit confirmation that the company’s tariff for its 495MW Combined Cycle Power Plant (CCPP) remains valid for the full three-year term under the Tripartite Power Purchase Agreement (TPPA). He cautioned that without a clear tariff framework, KAPCO would lack the legal and financial basis to continue grid support operations, potentially exposing the MEPCO region and the national grid to operational risks.

Nepra’s order of September 23, 2025, provisionally granted a tariff on a take-or-pay basis, stating it would apply “till September 2025, subject to extension based on the approved IGCEP/PAP,” with a maximum term of three years. However, KAPCO argued that the order’s reliance on outdated assumptions under IGCEP 2022–31 no longer reflects current grid realities or Nepra’s subsequent determinations.

The company pointed out that both the Power Acquisition Plan (PAP 2022–27) and the draft Transmission System Expansion Plan (TSEP 2025) confirm ongoing dependence on KAPCO’s 500MW capacity beyond FY 2025–26, due to delayed transmission upgrades at Vehari and Nagshah.

Furthermore, Nepra’s own generation licence extension order cited NTDC’s assessment that KAPCO’s 500MW generation remains vital until June 2027, particularly during peak summer demand in the MEPCO region.

“These official records collectively indicate that the Authority’s recent order needs alignment with current system conditions and planning frameworks,” Khan stated.

KAPCO has therefore requested Nepra to explicitly confirm that its 495MW tariff shall either remain valid until September 2028 (covering the TPPA’s three-year term) or continue until completion of the Vehari and Nagshah substations, whichever comes first.

The company warned that failure to issue such clarification could undermine grid reliability, disrupt operational planning, and contradict national policy objectives of optimizing existing generation assets before commissioning new capacity.

“Our request fully aligns with the government’s goal of ensuring a reliable power supply while minimizing consumer costs through efficient utilization of available resources,” Khan concluded.

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