KAPCO signs TPPA with CPPA-G, NGCPL
Last month, on May 20th, The National Electric Power Regulatory Authority (NEPRA) approved the tripartite agreement, governing electricity sales from KAPCO's 1,600 MW power plant in Kot Addu, Punjab. According to KAPCO's notice, NEPRA granted approval of the TPPA on May 19, 2025, subject to certain conditions being met.
The conditions include conducting an Initial Capacity Test (ICT) and Heat Rate Test (HRT) to benchmark efficiency, with an independent engineer evaluating and determining Simple Cycle Efficiency/Heat Rate numbers. Once these requirements are fulfilled, the TPPA will become effective for the operational phase of the power plant.
Meanwhile, NEPRA had granted a provisional tariff to KAPCO on a Take-or-Pay basis last month after a public hearing on April 8, 2025. Incorporated in 1996, KAPCO operates a multi-fuel fired power station with the capacity of 1,600 MW, selling electricity to the Water and Power Development Authority (WAPDA) under a Power Purchase Agreement (PPA).
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
2 days ago
- Express Tribune
NEPRA hears plea to cut tariffs by Rs0.65/unit
Listen to article Consumers are expected to get relief of Rs0.65 per unit in electricity bills for June 2025 under fuel charges adjustment (FCA). The National Electric Power Regulatory Authority (NEPRA) held a public hearing on Wednesday on a request by the Central Power Purchasing Agency (CPPA) to reduce the FCA for June. CPPA sought a reduction of Rs0.6541 per unit due to lower fuel costs. The reference cost was Rs8.3341 per kilowatt-hour (kWh), while actual cost turned out to be Rs7.6800/kWh. During the hearing, private sector participants raised concerns about the federal government's failure to fully pass on the notified tariff to industries and consumers. They questioned why the Rs1.71 per unit relief, linked to the petroleum levy, was not reflected in electricity bills. No response came from the Ministry of Energy, which was absent from the hearing. NEPRA also offered no explanation for the ministry's non-participation. One participant questioned why NEPRA had notified the federal government about the petroleum levy being transferred to electricity consumers, while still not reducing tariffs. An industry representative claimed that the industrial tariff has risen again to Rs35 per unit, worsening the cost of doing business int he country. Another stakeholder raised the issue of cheap gas supply to the Jamshoro power plant, arguing that the supply should be diverted to more efficient plants like Halmore or Quaid-e-Azam. CPPA responded that the gas could not be shifted to other plants due to dedicated pipeline infrastructure. On the issue of increasing the base tariff for bagasse-based power plants, a participant argued that bagasse is a by-product of sugar mills and questioned why these plants were given coal-equivalent rates. NEPRA's case officer replied that bagasse is a rich and efficient energy source. The tariff hike was not special treatment but related to previous outstanding payments. In another query, participants asked about the status of the Neelum-Jhelum hydropower project. NEPRA was informed that the project will remain out of the national grid for two more years. CPPA told the regulator that 13.31 billion units of electricity were sold in June. The actual generation cost stood at Rs7.68 per unit compared to a reference cost of Rs8.33. The reduction in fuel costs, across all sources, means consumers may receive over Rs8 billion in relief for June. The NEPRA chairman directed officials to brief power distribution companies (DISCOs) about the impact of circular debt. He asked for monthly data on loan defaults from DISCOs. Officials said the data was not available during the hearing but would be submitted. The chairman also instructed that full statistics from all DISCOs be presented during the next quarterly adjustment hearing on August 4. If approved, the proposed Rs0.65 per unit reduction will apply to all DISCO consumers, excluding lifeline users, for one month. According to CPPA-G data, a total of 13,744 GWh of electricity was generated in June. Hydropower contributed the highest share at 39.36%, followed by RLNG at 16.12%, local coal at 10.99%, imported coal at 10.16%, and nuclear at 10.06%. The costliest energy came from imported Iranian electricity at Rs22.5155/kWh, while solar energy was supplied at no cost. After accounting for 2.97% transmission losses and adjustments, 13,310 GWh were delivered to DISCOs at an average cost of Rs7.68/kWh. NEPRA has invited all concerned stakeholders to submit written or oral objections under the law. Full details, including CPPA's request and relevant documents, are available under NEPRA's regulations.
Business Recorder
2 days ago
- Business Recorder
Power sector's circular debt hits Rs1.6trn mark: CPPA-G
ISLAMABAD: The Central Power Purchasing Agency-Guaranteed (CPPA-G) revealed that the power sector's circular debt stood at Rs1.6 trillion as of June 30, 2025, excluding the financial impact of recovery shortfalls and distribution losses. This disclosure came just a day after the Power Division informed the Prime Minister during a Cabinet Committee on Energy (CCoE) meeting that circular debt had been recorded at Rs780 billion as of the same date. The higher figure was shared by CPPA-G CEO Rihan Akhtar in response to a query by NEPRA Chairman Waseem Mukhtar. When asked if the financial impact of low recoveries and distribution losses was included in the figure, the CPPA-G CEO clarified that it was not. Rs1.275trn loan to tackle circular debt: CPPA-G likely to sign term sheets with 18 banks The NEPRA Chairman then directed CPPA-G to provide the complete information to the regulator in time for a public hearing on Quarterly Tariff Adjustment (QTA) scheduled for next week. The public hearing was chaired in person by Members Amina Ahmed (Law) and Maqsood Anwar Khan, while the Chairman Mukhtar and Member (Technical) joined via Zoom. During the hearing, the CPPA-G CEO presented electricity generation data for June 2025 and requested a negative Fuel Charges Adjustment (FCA) of 65 paisa/kWh, compared to the current 50 paisa/kWh. This would result in a net tariff reduction of 15 paisa/kWh across the country. However, the adjustment will not apply to K-Electric (KE) consumers, as the Cabinet Division has not issued directives to NEPRA in this regard. KE has sought Rs4.75/kWh as FCA for May 2025, but the Authority has yet to decide. When asked by a journalist whether the June FCA for distribution companies (Discos) would apply to KE consumers, Member (Law) Amina Ahmed responded that NEPRA had not received any such instructions from the federal government. Currently, KE continues to file FCA requests based on its provisional tariff. She added that since KE's final seven-year tariff has now been notified, NEPRA has directed KE to file revised FCA requests using the final approved rates. A representative of the National Power Control Centre (NPCC), now known as ISMO, reported that total electricity generation in fiscal year 2024–25 remained below reference generation levels due to reduced demand. The peak generation during the year was 24,499 MW on June 26, 2025. The hearing also saw sharp criticism from industry representatives from Lahore and Karachi over high electricity tariffs. Aamir Sheikh, a consumer from the textile sector, pointed out that while the Prime Minister had announced Rs7.5/kWh relief, NEPRA had reduced it to only Rs2.5/kWh. He also raised concerns about the rising cost of bagasse-based power, which now nearly matches coal costs, suggesting a potential scandal. He recommended removing the fertilizer subsidy from RLNG prices to help lower electricity rates. Industry stakeholders reiterated their demand that, as announced by the Power Minister, electricity duty should not be applied to bills from July onward. They also requested that furnace oil be excluded from power generation due to the Rs82,000/ton levy imposed. Further, they demanded that the Rs1.71/unit reduction, based on an additional Petroleum Levy (PL) of Rs10/litre, be continued as its collection is still ongoing. 'It was supposed to continue for the entire year,' Sheikh emphasized, adding that gas levies were also intended for reducing electricity rates, but no such adjustments have been made yet. Rehan Jawed from Karachi highlighted the declining grid electricity demand due to the rapid spread of solar energy, particularly in high-loss areas. He argued that solar is reducing distribution losses and improving revenue collection. 'The real winners are solar panels,' he said. 'They're displacing expensive fossil fuel-based generation and improving overall system efficiency.' ArifBilwani, another participant from Karachi, voiced serious concerns over the increasing rates of bagasse-fired power plants, urging NEPRA to review the pricing. A representative from the Cold Storage Warehousing sector criticized NEPRA for failing to decide on their review petition pending since May 22, 2025. Copyright Business Recorder, 2025
Express Tribune
3 days ago
- Express Tribune
Power consumers to get Rs53b refund
Listen to article The government is set to pass on Rs53.4 billion worth of refunds to electricity consumers across the country, including those of K-Electric, under quarterly tariff adjustment for the fourth quarter (April-June) of fiscal year 2024-25. The National Electric Power Regulatory Authority (Nepra) will hold a public hearing on August 4 on a petition filed by the Central Power Purchasing Agency-Guarantee (CPPA-G), which is seeking a downward adjustment mainly because of lower capacity payments following negotiated settlements with independent and government power producers. According to CPPA-G data, the biggest reductions are proposed for Faisalabad Electric Supply Company (Rs15.579 billion), Lahore Electric Supply Company (Rs12.758 billion) and Multan Electric Power Company (Rs8.467 billion). Other companies that want to release refunds for their clients are Gujranwala Electric Power Company (Rs6.132 billion), Islamabad Electric Supply Company (Rs1.04 billion), Peshawar Electric Supply Company (Rs2.7 billion), Hyderabad Electric Supply Company (Rs6.818 billion), Sukkur Electric Power Company (Rs504 million) and Tribal Areas Electric Supply Company (Rs2.985 billion). However, Quetta Electric Supply Company wants to recover Rs3.594 billion from its consumers. The total requested amount for variable operation and maintenance (O&M) cost is Rs182 million, use of system charges and market operator fee are estimated at Rs804 million and the impact of incremental units is calculated at negative Rs662 million. Under the federal policy guidelines that ensure the application of uniform power tariffs across the country, Nepra said that the approved relief would also be extended to K-Electric consumers. Earlier this month, in a bold assertion of its regulatory autonomy, Pakistan's power-sector watchdog notified K-Electric's long-delayed multi-year tariffs for supply, distribution and transmission through 2030, which came despite an unresolved review motion filed by the federal government. The regulator notified an increase of Rs6.15 per unit in base tariff for K-Electric consumers. The government implements a uniform tariff across the country, for which it provides subsidy for K-Electric consumers. Nepra moved ahead with the notification after determining that no legal bar existed to halt its implementation. It invoked its enhanced powers under a 2021 legal amendment, which allows the regulator to issue tariff notifications directly – the authority that previously rested with the federal government. The move reflects pressure from international lenders, notably the International Monetary Fund (IMF) and the World Bank, to depoliticise tariff setting and fast-track power sector reforms. "This situation could impair K-Electric's financial health and undermine power supply continuity, ultimately affecting consumers and the broader energy market," Nepra said in its statement. The newly notified average power supply tariff for K-Electric is Rs39.97 per kilowatt-hour (kWh) for 2023-24, comprising Rs31.96/kWh in power purchase cost, Rs2.86 for transmission, Rs3.31 for distribution and Rs2.28 in supply margin. A prior year adjustment of minus Rs0.44/kWh has also been included. Nepra estimated the company's total revenue requirement for financial year 2023-24 at Rs606.9 billion, with Rs34.7 billion allocated for supply margin and Rs36.2 billion set aside to cover recovery losses.
