The National Assembly’s Standing Power Committee was informed that the government has ceased with capacity payments to 22 independent power producers (IPPs), which resulted in a total saving of RS1.5 trillion and is expected to provide relief to consumers by reducing electricity costs with RS4 to RS5 per . unit.
The meeting attended power secretary Dr. Muhammad Fakhre Alam Irfan, who briefed the committee on cessation of capacity payments to 14 oil-based and 8 bagasse-based IPPs.
The secretary also mentioned that efforts are underway to complete payments for further IPPs. The end of these payments is expected to lead to significant savings where consumers are ready to benefit from lower electricity rates, he said.
Mustafa Kamal also raised concerns about some IPPs who claimed their appointments were terminated during hardness.
The power secretary replied by saying that several IPPs had violated the conditions of their contracts and these violations were pointed out by the government teams. The IPPs were given the opportunity to either comply with or face a financial revision of the National Electric Power Regulatory Authority).
He also said that two IPPs refused to cooperate and prompted NEPRA to initiate audits with advertisements for the audits now published for the non-compatible IPPs.
The meeting also discussed a question of the additional 7.8 million units that were burdened by Lesco (Lahore Electric Supply Company) consumers. The committee decided to form a subcommittee to further investigate the matter.
Committee member Rana Mohammad Hayat expressed concern about rising bills and rising WAPDA (WATER AND POWER DEVENTION AUTHORITY) expenses in the last three to four years.
He questioned the government’s response to the growing financial burden to the public and called for clarification on when consumers will be given. He also raised the issue of local coal’s cost -effectiveness in electricity generation and asked for transparency regarding the potential savings.
In response, the power department officials revealed that the cost of generating electricity using local coal would be RS4 per year. Unit compared to RS16 per Device when using imported coal. Electricity produced from oven oil costs between RS30 to RS32 per Unit.
Kamal further questioned the long-term strategy and asked about the plans for the future whether coal-based plants are facing operational issues, especially when hydel and thermal plants are phased in in favor of coal. The power secretary assured the committee that coal factories can be installed within a short time frame.
In addition, Power Division is conducting modern forecasts for the next 10 years and expects many of the oven oil -based power plants to be closed down within the next three years.
