Islamabad:
The revision of agreements with independent electricity producers (IPPS) has led to life savings from RS1.3 Billions, while the government is working to pass on these economies to consumers, the Division of Power revealed on Tuesday.
Electricity consumers paid Rs 2.5 to 2.8 Billions per year to PPI as capacity payments. Some of these PPIs have received payments without producing a single electricity unit due to the defective agreements concluded in the past.
To resolve this problem, the current government has decided to renegotiate agreements with PIPs to reduce capacity payments. This revision has so far led to a reduction in RS7 per unit in electric prices. The government is still ensuring that this advantage reaches consumers, said the division of power.
During a recent meeting of the cabinet, the Minister of Power Sardar Awais Ahmad Khan Leghari presented an examination of government policies – both businesses and planned – to improve the efficiency of the power sector.
Key measures included the reduction in RS4.96 prices at the national level in the last eight months, the renegotiation of prices with 14 PPI and eight PPI based on the bagasse to guarantee life savings of 1,333 billion rupees and policies aimed at stimulation on demand.
The Minister has also described the planned reforms in the electricity sector, such as the conversion of coal -based electric power plants imported into Thar coal, the development of an integrated system plan, the rationalization of net measurement and the reduction of national circular debt.
He underlined the progress in the solarization of tube wells in Balutchistan, declaring that out of 27,000 tubular alcohols, 4,000 had already been converted, resulting in savings of approximately 100 million rupees due to losses in the electricity sector in the province.
The Minister also detailed the measures taken by the government to reduce the ineffectiveness of distribution companies (nightclub) and explained that policies had been implemented to improve sector governance by strengthening the efficiency of transmission and distribution.
As part of a revised agreement, we learned that 14 PPIs had accepted the new conditions of the agreements, including the return of excess profits up to 31 billion rupees – compared to the initial requests of 55 billion rupees and have given up complaints for late payment interest (IPI) on the current amounts.
On the other hand, the Government has agreed to close the underly investigations of the National Accountability Bureau (NAB) and the National Electric Power Regulatory Authority (NEPRA) against certain PPIs.
Potential buyers of UPL and UPL-II had agreed to give up their complaint on LPI claims worth 62.5 billion rupees on the condition that the government would facilitate the renunciation of the LPI claim by the oil and gas development company (OGDCL) of the UPL and UPL-II, amount to 46 billion.
Similarly, five PPIs on the SUP Northern Gas Pipeline Limited (SNGPL) network had also given up their LPI claims to reach 4.6 billion rupees provided that the government would facilitate the allegations of SNGPL SNGPL which amounted to RS1.9 billion rupees for PPI.
