Low cost electricity production is govt’s priority: Sardar Awais Ahmad Khan Leghari
The government has no issue with a hydropower project being the least expensive through competitive bidding in the open market.
ISLAMABAD ( WEB NEWS )
Minister for Power Sardar Awais Ahmad Khan Leghari has said production of least cost electricity is the only consideration of the government.
Addressing an International Hydropower Conference in Islamabad on Thursday, he said renewable energy is the way forward to generate the least cost electricity in the country.
He, however, said the government has no issue with a hydropower project being the least expensive through competitive bidding in the open market.
The Minister said the government is committed to protecting consumers’ interests. He said the government has saved 1.1 trillion rupees by reviewing contracts with Independent Power Producers.
Federal Minister for Energy Owais Leghari has stated that negotiations with the IMF are ongoing, and electricity prices could be reduced by 10 to 12 rupees per unit. Speaking to the media at the Parliament House, he mentioned that the negotiations with IPPs (Independent Power Producers) have already had an impact on the common man, with electricity prices being reduced. He added that a savings of 1.1 trillion rupees has been achieved so far.
Owais Leghari further explained that the next phase of negotiations would involve government power plants, with all IPP agreements being reviewed. After the revision, there will be substantial savings for the public. He also noted that 15 additional IPP agreements are being brought to the Cabinet for approval.
Regarding K-Electric, the Minister mentioned that they have requested a large sum for the multi-year tariff. He expressed the view that the multi-year tariff should not be that high and should be reduced. The decision will be made by NEPRA (National Electric Power Regulatory Authority), keeping the public’s interest in mind.
He also discussed a meeting with the Chief Minister of Khyber Pakhtunkhwa (KP) regarding the eradication of the “kunda” (illegal electricity connection) culture. He stated that the performance of the KP government in addressing the kunda culture was not satisfactory. Previously, in a meeting of the National Assembly’s Power Committee, Owais Leghari mentioned that 75% of the total electricity cost is made up of capacity charges. He further revealed that there have been four meetings with the Chief Minister of KP, and an agreement was made to initially allow electricity to flow freely on the feeders where the most theft occurred. The condition was that once electricity was provided, they would then work on removing illegal connections.
He stated that the initiative was implemented for 75 days, but despite efforts, the administration did not assist in removing the illegal connections. As a result, his company suffered an additional loss of 6 billion rupees, and several feeders only had electricity for two hours. He clarified that there was no discrimination against KP, and no special treatment was given to any area.
Regarding gas for captive power plants, Owais Leghari mentioned that a decision would be made within a month. He also highlighted that residential consumers have already received a 4-rupee per unit relief in electricity tariffs. The Minister stated that electricity prices could potentially be reduced by 10 to 12 rupees per unit. He also mentioned that agreements with five IPPs have already been terminated, while eight gas IPPs’ tariff revisions have been approved by the Cabinet. Talks with sixteen IPPs are ongoing, and after that, negotiations with government-owned IPPs will begin.
Finally, he shared that after dealing with the government plants, the issue of their return on equity (ROE) would be addressed. He said that K-Electric is asking for a profit of 500 billion rupees over the next 5-7 years, which, in his view, is unjust. The decision will be made by NEPRA, and it is expected that this will also affect consumers in Khyber Pakhtunkhwa.