Senate panel demands data on IPPs amid surging power tariff

ISLAMABAD: Amid rising electricity costs and significant capacity payments by consumers to private power generators, the Senate Standing Committee on Power has sought extensive documentation and data regarding the country’s Independent Power Producers (IPPs). The Committee officially wrote to the Power Division following a meeting on July 12, 2024.

The senate secretariat has directed the division to submit the data well before the committee’s next meeting, scheduled for the end of July or early August, to allow members ample time for review and discussion.

Notably, the July 12 meeting of the panel chaired by Senator Mohsin Aziz had emphasized that rising electricity prices are causing severe distress to citizens and urged immediate action to address the issue.

It highlighted the need to continuously review the IPPs agreements and assess the damage these private companies have inflicted on the public. The Private Power and Infrastructure Board (PPIB) managing director told the panel that the country currently had an installed capacity of 45,000 megawatts, with 60 percent generated from private sector power plants (IPPs).

The demand for the data and further details regarding the private power generators articulated in a directive issued on Thursday by the Senate Secretariat outlines several key areas of interest to aid the committee’s ongoing review of the power sector. A copy of the directive available with ‘The News’ has directed the Ministry of Energy (Power Division) to provide comprehensive details on the agreements with IPPs, particularly focusing on contracts established since 1992.

The asked-for information includes the original agreements, the cost details per kilowatt-hour (kWh) for each plant, and a comparative analysis of energy prices during that period.

Additionally, the committee seeks information on the historical rates at which energy was purchased by other developing countries, details on capacity payments made over the last two decades highlighting reasons such as evacuation failures or temporary faults in feeder evacuation, instances of technical faults in power plants over the last twenty years, and identification of the sponsors of each private sector power plant.

The directive also calls for agreements of wind power plants established in the last six years, including cost and rate details. Information on current agreements with IPPs, including changes over time and details of return on investment (ROI) and return on equity (ROE), is also sought.

The committee also seeks summaries of power policies over different periods, heat efficiency levels of the plants both current and at the time of establishment, the best efficiency levels globally, and the country’s total Maximum Demand Indicator (MDI) of electricity.

The Committee’s chairman has emphasized that the information should be provided with a focus on gas and furnace oil-based private power plants established since 1992, particularly those with a capacity of 50 megawatts or more.