NEPRA bars IPPs contract extension debate

During a public hearing on Tuesday, the National Electric Power Regulatory Authority (NEPRA) chairman barred interveners from discussing the renewal of independent power producers' (IPPs) contracts by the regulator.

The interveners took up the matter of capacity payments being charged by IPPs during a public hearing. When the case to extend their contracts came up for debate, the chairman said the topic did not relate to the hearing in question. Meanwhile, the businessmen running these IPPs called for a forensic audit of the IPPs.

Despite an economic merit order (EMO) being violated in generating power from these plants, the National Electric Power Regulatory Authority (NEPRA) had taken a decision on the matter without deducting the cost from IPPs that forced a multibillion-rupee burden on consumers over the last three years.

An appellant against these decisions argued during the public hearing conducted by the authority that a tribunal and the Islamabad High Court found that 20 decisions taken by NEPRA since March 2021 have been described as "impugned".

The appellant argued that the failure to adhere to merit orders led to higher electricity costs for consumers and cited inefficiencies in IPPs. They claimed that correcting these inefficiencies could have saved the public approximately Rs3.3 billion.

The appellate tribunal's ruling covers 15 monthly fuel charges adjustments (FCAs) and five quarterly tariff adjustments (QTAs). The tribunal has also recommended a third-party audit of the Central Power Purchasing Agency (CPPA) and the National Transmission and Dispatch Company (NTDC), highlighting issues related to non-compliance with the merit order and inefficiencies in powerplant operations.

During the hearings, NEPRA's Chairman Wasim Mukhtar expressed frustration with the process and criticised the parties involved for their conduct.