- IPP contract changes could save Rs411 billion annually: sources.
- Tariff revision for bagasse power plants saves Rs238 billion.
- The extension of the winter electricity assistance program is also under study.
ISLAMABAD: The federal government is working on various options to reduce electricity tariffs, with the aim of reducing prices by up to Rs 10 per unit, sources said Geo News Tuesday.
According to sources, the government’s first option is to negotiate with independent power producers (IPPs) to pass on the profits to the public.
By terminating agreements with five IPPs, the government is expected to save a total of Rs411 billion, with an annual saving of Rs70 billion.
Sources in the power ministry revealed that a tariff revision for eight bagasse-based power plants would save Rs 238 billion, which equates to an annual saving of Rs 8.83 billion.
Additionally, termination or modification of contracts with 16 additional IPPs would result in an additional profit of Rs481 billion.
These savings will be passed on to consumers in the form of reduced electricity costs.
The sources added that the federal government was also considering an extension of the winter electricity assistance program, as well as proposals to reduce taxes on electricity bills.
The government currently generates more than 800 billion rupees annually from taxes levied on electricity bills.
The development comes as the government led by Prime Minister Shehbaz Sharif has once again insisted on curbing exuberant electricity prices.
In addition to finalizing the termination of contracts with five IPPs last year, the government also finalized negotiations with RFO-based power plants on take-and-pay terms last month.
Islamabad, as reported by Newsaims to reduce electricity tariffs by Rs 12 per unit by March 2025 through agreements with IPPs and renewable energy sources like wind and solar power plants.
“We will be able to reduce the electricity tariff by Rs 3 per unit through negotiations with IPPs, GPPs, wind and solar power plants. And debt reprofiling will further help reduce the tariff by Rs 4 per unit,” a senior government official said. publication in December 2024.
“Government officials want to reduce taxes on electricity bills with an impact of Rs 5 per unit. This is how the off-peak tariff of Rs.41.68 per unit would increase to Rs.29.68 per unit and the peak-hour tariff of Rs.48 would be reduced to Rs.36 per unit,” he added.