IPPs Are Making Home Electricity Very Unaffordable

Private and state-owned Independent power producers (IPPs) are paying significantly higher rates than those achieved through competitive administration procurement.

Key points

• The Power Division and the National Electric Power Regulatory Authority (NEPRA) have identified inefficiencies in the way some IPPs procure imported coal.
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• By comparison, some coal contracts involving IPPs offered discounts of only $0.20 to $0.50 per ton.
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• The Power Division remarked its review identified significant inefficiencies in imported coal procurement and issued new policy guidelines to address them.

For context, the Power Division and the National Electric Power Regulatory Authority (NEPRA) have identified inefficiencies in the way some IPPs procure imported coal. The extra cost is ultimately reflected in electricity costs through monthly fuel cost adjustments. Solar Owners to Obtain Green Meters Faster.

In practice, the matter became more apparent after a recent tender for coal supply to the 660-megawatt Jamshoro Power Plant secured a discount of $7.12 per ton from the supplier.

Meanwhile, the Power Division remarked its review identified significant inefficiencies in imported coal procurement and issued new policy guidelines to address them. The measures could save the national exchequer up to Rs. 380 million annually.

NEPRA had previously questioned the coal procurement process followed by a private power plant. The regulator discovered that this plant's six-year coal supply contract offered discounts of only $0.20 to $0.50 per ton and evaluated bids against estimated future coal costs.

NEPRA remarked this approach could prevent suppliers from competing effectively on discounts as future coal rates could change.

It continued that a stronger focus on supplier discounts during bid evaluation could have produced more competitive offers. Stay Connected with ProPakistani.

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In short, iPPs Are Making Home Electricity Very Unaffordable is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.