- The government is looking at captive and bagasse power plants for cost savings.
- Domestic electricity rates are already reduced by Rs4 per unit.
- Minister criticizes K-Electric’s Rs 500 billion profit claim.
ISLAMABAD: Federal Minister for Energy (Electricity Division) Awais Leghari said discussions with the International Monetary Fund (IMF) regarding captive power plants were underway, with the possibility of reducing power tariffs. electricity from 10 to 12 rupees per unit.
Speaking at a session of the National Assembly’s Standing Committee on Energy on Thursday, Leghari expressed optimism that the issue was close to being resolved.
The minister revealed plans to review eight bagasse-based power plants and 16 other plants.
He noted that these assessments would be followed by an assessment of the return on equity of state-owned factories. “By the end of this month, the issue of captive power plants will be resolved,” he said, adding, “Electricity prices for domestic consumers have already been reduced by Rs 4 per unit” .
The Power Minister expressed his ambition to reduce the overall electricity tariff by Rs 50, but also spoke about the complexity of achieving this target.
Responding to concerns over K-Electric, Leghari criticized the power utility’s demand for Rs500 billion in profits over the next 5-7 years, calling it unreasonable.
He pointed out that such a profit margin would have an unfair impact on consumers in Khyber Pakhtunkhwa and other regions.
The statement comes amid repeated calls from the Prime Minister Shehbaz Sharif-led government for the need to reduce exuberant electricity prices.
Earlier this month, sources told Geo News 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.
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.