Non-availability of NJHP project: Consumers overpaid Rs167.787bn for costly power

ISLAMABAD: A high-level committee headed by the Minister for Power has held that consumers had paid an additional cost of Rs. 167.787 billion (or Re. 0.7551/unit) for using expensive power that was next in the dispatch order, due to non-availability of 969 MW Neelum Jhelum hydropower project from FY 2022-23 to 2024-25, sources close to Chairman Wapda told Business Recorder.

Sharing the details, sources said, tariff of NJHPC is based on take and pay basis, therefore the company is not receiving capacity payment due to closure of plant, hence there is no financial impact of the plant on consumers.

Funds generated in shape of Neelum Jhelum Surcharge (NJS) have been taken as grant which has significantly reduced its tariff. As Capacity Payments are not being allowed hence marginal cost is not attributable to NJHPC.

Meeting discusses issues related to NJHPP

During the meeting on July 14, 2024,Prime Minister constituted the following high-level committee to deliberate and present impact on consumer end tariff sequel to headrace tunnel collapse in NJHPC: (i) Federal Minister for Energy (Power Division)( Convener); (ii) Federal Minister for Water Resources(Member);(iii) the then Deputy Chairman Planning Commission (Member); (iv) Federal Secretary for Energy (Power Division)(Member); (v) Federal Secretary Ministry of Water (Member); (vi) Chairman Nepra (Member); and (v) Chairman Wapda (Member).

The Terms of Reference (TORs) of the committee were as follows: (i) examine the tariff impact of reported frequent outages at NPHPC due to structural damages since COD; (ii) mechanism to ring fence consumers against additional charges due to plant outages caused by design/construction flaws; and (iii) review existing PPA template to protect consumers from bearing losses caused by inadequacies on part of power producers.

First meeting of the Committee was held on Friday, July 19 2024 at 2:00 in Power Division under the convenership of Federal Minister for Energy (Power Division). All members of the committee attended the meeting. From Power Division Joint Secretary (Power Finance), Chief Executive Officer CPPA-G, Chief Executive Officer and CFO of Neelum Jhelum HPP Company also attended the meeting.

The convener highlighted salient features of the meeting chaired by the Prime Minister on July 14 2024regarding collapse in the Head Race Tunnel of NJHPC and its consequent impact on various components of NJHPC.

Copyright Business Recorder, 2025