ISLAMABAD: The federal government has expressed optimism about reducing electricity prices by Rs 10-12 per unit amid ongoing talks with the International Monetary Fund (IMF) on captive power plants. “The issue of self-consumption power plants is close to being resolved,” Federal Minister for Power (Power Division) Awais Leghari told a meeting of the National Assembly’s Standing Committee on Energy on Thursday. The minister revealed plans to review eight bagasse-based power plants and a further 16 power plants. He noted that these assessments will be followed by an assessment of the return on equity of state-owned plants. “By the end of this month, the issue of own power plants will be resolved,” he said, adding, “Electricity prices for domestic consumers have already been reduced by Rs 4 per unit.” The power minister expressed the ambition to reduce the total electricity tariff by Rs 50, but also cited the complexity of achieving this target. Responding to concerns about K-Electric, Leghari criticized the power company’s demand for a profit of Rs 500 billion in the next 5-7 years, calling it unreasonable. He pointed out that such a profit margin would unfairly affect consumers in Khyber Pakhtunkhwa and other regions. The statement comes at a time when the government led by Prime Minister Shehbaz Sharif has repeatedly called for the need to bring down skyrocketing electricity prices. Earlier this month, sources told Geo News that tariff revisions for eight bagasse-based power plants will save Rs 238 billion, which equates to an annual savings of Rs 8.83 billion. In addition, termination or modification of contracts with another 16 IPPs would bring an additional benefit of Rs 481 billion. These savings are passed on to consumers in the form of reduced electricity costs. In addition to finalizing the termination of contracts with five IPPs last year, the government last month also completed negotiations with RFO-based plants on take-and-pay terms. It was earlier reported that Islamabad aims to reduce electricity rates by Rs 12 per unit by March 2025 through agreements with IPPs and renewable energy sources such as wind and solar. “We will be able to reduce electricity tariff by Rs 3 per unit through negotiations with IPPs, GPPs, wind and solar plants. And debt reprofiling will further help reduce tariff by Rs 4 per unit,” said a senior government official. publication in December 2024.
