IPP deals to result in thin tariff cut

The government has estimated power tariff reduction of only Rs0.50 per unit following revision in agreements with seven independent power producers (IPPs). However, officials of the Power Division claimed that total savings would be Rs920 billion over the entire life of the private-sector IPPs. The savings comprise capacity payments to the IPPs, but the amount is very low when compared with the annual capacity charges of Rs2.5 trillion to Rs2.8 trillion paid to the IPPs. At a public hearing held on Monday to review the revised tariff, the National Electric Power Regulatory Authority (Nepra) was informed that consumers would enjoy a relief of Rs0.50 per unit following revision in agreements with seven IPPs.