Govt expected to decide tariffs revision for IPPs next week

KARACHI: The government is expected to take decision on tariff revision petitions of the two major independent power producers next week, The News learnt on Saturday.

The National Electric Power Regulatory Authority (Nepra) would take up the petitions of Gul Ahmed Energy and Tapal Energy on June 18, 2019. The independent power producers (IPPs) have sought five-year extension in their power purchase agreements (PPAs) with K-Electric.

Tapal Energy sought determination of tariff for proposed extension in PPA for another five years from June 20, 2019 to June 20, 2024 for its power plant located in Karachi.

The plant generates 126 megawatts of gross and a net of 123.5 MW electricity on residual fuel oil to supply it to K-Electric.

In September 1995, Tapal Energy entered into a power purchase agreement with K-Electric Limited – formerly Karachi Electric Supply Corporation Limited – for 22 years.

K-Electric has also submitted a power acquisition request to the authority, requesting the authority to allow the utility to acquire power from Tapal Energy.

Similarly, Gul Ahmed Energy Limited filed a tariff petition with the Nepra to determine tariff for the proposed extension of the PPA for further five years from November 3, 2019 to November 2, 2024, for its 136.17 MW power plant based on residual fuel oil.

The power plant is located at Korangi Industrial Township and the power generated from it is supplied to K-electric. Gul Ahmed proposed a tariff control period of five years.

Gul Ahmed proposed a tariff of Rs12.0174 / kilowatt-hour (kWh).

In June 1995, Gul Ahmed entered into a power purchase agreement with K-Electric for 22 years.

It has successfully operated its facility for more than 21 years. In compliance with its power purchase agreement obligations, the company generated approximately 790 gigawatt hours /annum of power to KE.

Gul Ahmed and K-Electric have been engaged in discussions for extending the term of the PPA in pursuance of their rights. K-Electric submitted a power acquisition request to the authority, requesting the authority to allow the utility to acquire power from Gul Ahmed for the PPA term extension.

Together, the IPPs make up for more than 10 percent of consumer demand in the city and the impact of tariff revision on electricity bills is yet to be seen.