PTI government decision saves Rs 182 billion from thermal power plants

Shares
PTI government decision saves Rs 182 billion from thermal power plants

Islamabad-NEPRA has reduced the Return on Equity (RoE) and Return on Equity During Construction (RoEDC) components of 12 thermal power plants, which will result in an estimated saving of Rs. 182 billion.

Nepra has reduced the Return on Equity (RoE) and Return on Equity During Construction (RoEDC) components of 12 thermal power plants, established under power generation policy 2002, having cumulative net capacity of 2412 MW, said Nepra spokesman in a statement issued. The reduction in tariff will result in estimated saving of Rs 182 billion over the remaining life of the projects, he said.

The decision was made on the request, filed by the Central Power Generation Agency (CPPA-G). Central Power Generation Agency (CPPA-G) filed tariff adjustment applications with Nepra for reduction in RoE and RoEDC components of twelve thermal power plants. CPPA-G requested to revise RoE and RoEDC components on the basis of 17 per cent return and fixed exchange rate of Rs. 148/$ without dollar indexation for local equity, whereas, revised RoE and RoEDC components on the basis of 12 per cent return with dollar indexation for foreign equity.

The Authority, under the prevailing rules and regulations admitted the applications and subsequently conducted a hearing in the matter on March 03, 2021. After detailed deliberations, the Authority decided on April 02, 2021 by revising the RoE and RoEDC components for local equity on the basis of 17 per cent return and fixed exchange rate of Rs. 148/$ without future indexation and RoE and RoEDC components for foreign equity on the basis of 12 per cent return with future dollar indexation. It is worth to mention here that earlier Nepra had reduced the Return on Equity (RoE) of three nuclear power generation plants of 931MW which will result in saving of approximately Rs 2.05 billion annually for next 25-37 years.

Nepra, in a landmark decision, had reduced the RoE component of three nuclear power generation plants including C-2, C-3, and C-4 and has slashed the tariff by Re. 0.2515 per unit.

It is apprised that the above nuclear power generation plants, in line with Cabinet Committee on Energy (CCoE) decision of 27th August 2020, have filed petitions with Nepra for reduction in their RoE components on account of reduced RoE rate and freezing exchange rate to Rs. 148/$. The Nepra, after public hearing decided to freeze the exchange rate at Rs.148/$ and reduce the RoE from 15 per cent to 14.5 per cent for the remaining life of these projects.

Last month, the National Electric Power Regulatory Authority was informed by the government that agreements with 30 out of 47 IPPs have been signed.