Electricity prices to drop by Rs10–12 per unit, says Leghari

Federal Minister for Energy Owais Leghari has revealed that renegotiations with Independent Power Producers (IPPs) are already reducing power prices, with further significant relief likely.

Briefing the National Assembly’s Power Committee, the federal minister said that power rates could be reduced by Rs10 to Rs12 per unit after the agreements are finalized.

Leghari revealed that 75 percent of the cost of electricity comes from capacity charges levied by IPPs. “The impact of these contract revisions is being conveyed to the public,” he said, adding that contracts with 12 IPPs have been reviewed, including bagasse-based plants, while negotiations have been completed for 15 more.

“The cabinet will approve these amendments next week, while decisions regarding captive power plants will be taken within a month,” he added.

The minister also said that five IPP contracts have been terminated, and review approval has been given for eight bagasse power plants. Talks are underway with 16 additional IPPs, including government-owned plants. As a result of these talks, domestic consumers have already received a relief of Rs4 per unit in electricity tariffs.

Addressing concerns over power theft in Khyber Pakhtunkhwa (KP), Leghari accused the provincial government of failing to cooperate despite pre-existing agreements. He revealed that the KP Chief Minister had demanded unlimited power supply to feeders with high theft rates before removing illegal connections.

“We implemented the agreement for 75 days, yet the provincial administration failed to remove the hitches, resulting in an additional loss of Rs6 billion to our company,” Leghari said.