Upfront tariff of Rs10.54 per unit for LNG-based power plants likely

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) is geared up to offer upfront tariff of Rs10.54 per unit for LNG-based power plants to be installed in Punjab. And on top of that, the regulator on the recommendations of the Nawaz government is also inclined to come up with the upfront tariff for rental power plants (Short-Term Independent Power Plants) and some of the IPPs that were earlier closed down.
The watchdog while accepting the petition of Private Power Infrastructure Board (PPIB) seeking Rs10.54 per unit upfront tariff for the LNG-based plants has offered to fix the reference price of LNG at $12 per MMBTU, knowing the prevalent prices of LNG hover around $8 per MMBTU. However, the proper hearing of the petition is yet to start. Officials said that the tariff for LNG-based power plants would last for 30 years. The plants have been offered 15 percent rate of return. Nepra, however, has sought opinions till February 22 from all the stakeholders over the petition seeking upfront tariff for the LNG-based power plants. The regulator will hold hearing on the petition on February 23. According to the top mandarins of the regulator, in the light of the decisions taken by ECC, Nepra has decided to announce the upfront tariff of Rs12.57 per unit for RPPs and non-operational IPPs.
The ministry of power wants to add 1,500 MW of electricity in the system in the forthcoming summer season to mitigate the power outages that are expected to haunt the Nawaz regime in summer season because of expected massive spike in the electricity demand.
Officials in the Ministry of Water and Power disclosed the IPPs that include Reshma, Gulf and the plants that were earlier closed down in Punjab by the government will now provide electricity to the national grid under ‘take and pay mechanism’ for three years. They said short-term IPPs will not be paid capacity payment and the government will start purchasing electricity from them once their upfront tariff gets finalised and formally announced.