Govt plans to cut electricity prices by Rs10 per unit

To relieve electricity consumers from the pressure of capacity payments, the government has developed a new plan that could reduce electricity prices by Rs10 per unit.

Official documents reveal that discussions are underway with independent power producers (IPPs) to introduce a “give electricity, take money” or “take and pay” policy.

This approach ensures that payments will only be made to power companies that actually generate electricity, eliminating the current system of capacity payments for idle power plants. The government’s task force estimates that this policy could save up to Rs948 billion annually, providing consumers with a relief of Rs9.70 per unit.

Currently, consumers face an annual burden of Rs1,916 billion due to capacity payments. If negotiations with existing IPPs are successful, this reduction in capacity costs will significantly benefit electricity users nationwide, helping to lower their overall energy expenses.

Earlier, the federal government has decided to pay Rs 72 billion as a final settlement to five Independent Power Producers (IPPs) after terminating agreements with them.

Prime Minister Shehbaz Sharif announced on October 10 that the agreements with the five IPPs would be terminated in the first phase.

As part of the settlement, Hubco will receive Rs 36.5 billion, Rousch Power Rs 15.5 billion, Lalpir Power Rs 12.8 billion, Atlas Power Rs 15.5 billion, and Sapphire Power Rs 6 billion.

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