ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has granted provisional tariff to Kot Addu Power Company (Kapco) on Take-or-Pay basis after hectic debate at a public hearing on April 8, 2025.
The company’s CEO, Shahab Qader Khan, who struck a deal with the Task Force on Power, made a request to the authority to approve provisional tariff for the 495 MW units and disputed issues will be settled subsequently.
The request of provisional tariff has been examined. The approved interim/ provisional tariff was granted under Rule 4(7) of the Tariff Rules which is reproduced: “The Authority may, while admitting a petition, allow the immediate application of the proposed tariff subject to an order for refund for the protection of consumers, or for satisfactory security to be provided for refund, while the proceedings are pending before the Authority.”
KE’s petition: Nepra notifies Rs3.02 relief under Jan FCA
The Authority noted that as per Nepra Act, for determination of tariff, a minimum period of four months is provided and during that period the electricity being generated by the subject plant would continue to be supplied to the consumers and in the absence of approved tariff the payment shall keep on accumulating.
Therefore, keeping in view the above and the concerns raised by CPPA-G on the approved interim tariff, the request of revised interim tariff is justified.
Accordingly, the Authority has decided to accept the request of KAPCO for allowing provisional tariff which shall be subject to final decision on the proceedings pending before the Authority.
For Block-1, total tariff is Rs30.3010 per unit on gas/ LNG and for Block–II Rs32.9806 per unit.
On LSFO, total tariff for Block -1, will be Rs31.8915 per unit for and Block–II Rs34.4770 per unit.
As requested in the addendum, KAPCO shall be entitled to receive 25 per cent ROE on Take-or-Pay basis while the remaining ROE shall be linked with actual dispatch exceeding 25 per cent.
The fuel cost components have been worked out on the basis of LSFO Price of Rs150,817.50/ Ton including transportation charges and Gas/ RLNG price of Rs3,442.78/ MMBTU. The fuel cost components shall be subject to adjustment for variation in fuel price.
The despatch shall be on economic merit order. The revised provisional tariff shall supersede the approved provisional tariff of August 4, 2023. The provisional tariff shall take effect from the date of issuance of this decision.
Member (Tech) Rafique Shaikh, in his additional note stated that in light of the responsibilities outlined for power transmission company, including NTDC and Discos in Nepra Act and applicable documents, he is of the considered opinion that the interim tariff should be granted to this company strictly on a “Take-and-Pay” basis.
However, whenever this plant operates in violation of the Economic Merit Order (EMO), the differential cost between the available cheaper generation and the cost of generation from the plant operated in violation of EMO should not be passed on to electricity consumers.
Instead, this cost should be borne by the entities responsible for providing a constraints-free transmission system.
Copyright Business Recorder, 2025
Comments
Comments are closed for this article.