According to official estimates, electricity prices can be lowered by up to twenty rupees per unit. By revising agreements with Independent Power Producers (IPPs), the federal government has devised a formula to lower electricity prices by Rs20 per unit, with a potential reduction of Rs9.70 per unit.
Negotiations with 14 IPPs have been concluded, according to the working document, while agreements with six will be cancelled. All IPP agreements will be revised, which will lower power costs by Rs9.70 per unit.
In order to implement the “Electricity for Payments” strategy, the government intends to persuade commercial power plants. Next Monday, the Cabinet is anticipated to get a summary of these IPPs.
Convincing IPPs to implement the “Electricity for Payments” strategy will reduce capacity payments by half, the documents claim. At the moment, capacity payments from customers are Rs1,916 billion per year. The revised agreement will lower this sum to Rs967 billion.
Eight separate taxes that are applied to electricity bills are also being eliminated by the Ministry of Energy. Every year, these taxes cost consumers Rs. 954 billion. Prices for power might drop by an extra Rs. 9 per unit if these taxes are eliminated.
Additionally, according to the working paper, converting coal-fired power facilities from imported to domestic coal will result in an additional Rs. 2 per unit reduction in electricity costs.
During yesterday’s federal cabinet meeting, the prime minister said the country’s economy is stabilising and that the government intends to ask the IMF to lower electricity prices.
He underlined that lowering electricity costs is necessary for the expansion of exports, businesses, and agriculture.
In order to speed up the process, the PM indicated that more meetings would be conducted this week and that talks are still going on with possibilities to reduce electricity bills.
