Neelum-Jhelum shutdown bleeds millions, fuels energy crisis

ISLAMABAD: The 969-MW Neelum-Jhelum Hydropower Project, offline since May due to a severe rock burst fault, continues to drain hundreds of millions from the national exchequer while depriving consumers of low-cost electricity, experts revealed. The shutdown has intensified the country’s hydroelectric power shortfall, contributing to ongoing energy challenges.

During a public hearing, the NEPRA chairman expressed frustration over the Central Power Purchasing Agency’s (CPPA) lack of clarity on repair costs. “No estimates have been presented yet,” he remarked, adding that a prime ministerial inquiry committee is currently investigating the incident. NEPRA emphasized that decisions on funding repairs will depend on the inquiry report’s conclusions.

The hearing, which was held Wednesday on the petition of CPPA on behalf of state-run power distribution companies (Discos), reserved a decision on a potential Rs0.71 per unit reduction in electricity tariffs for consumers, under a fuel cost adjustment for September 2024. If approved, the tariff relief could translate to an overall consumer savings of Rs8.5 billion.

The CPPA proposed the reduction, citing lower generation costs due to increased reliance on hydropower and nuclear energy sources in September. However, the reduction would exclude lifeline consumers, prepaid customers and electric vehicle charging stations, according to Nepra.

During the hearing, CPPA officials reported a shift in peak demand hours—from midnight to 1 am—attributed to increased solar power generation and a drop in electricity demand. Despite the potential for savings, CPPA also requested recovery of Rs7.5 billion in previous adjustments from consumers. Additionally, the power regulator raised questions about the performance and efficiency of certain coal-fired plants, noting reduced generation from some coal resources.