- Nepra public hearing presided by Chairman Waseem Mukhtar.
- Goal of strategic adjustment is to lessen tariff volatility.
- Additional reforms include reducing indexation for O&M costs.
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has decided to stop using dollar-based indexations for the Haveli Bahadur Shah, Balloki, Northern Power Generation Company Limited (NPGCL), and Central Power Generation Co. Ltd (CPGCL) power plants, in order to switch to rupee-based indexations that are fixed for the duration of the useful life.
This move will pave the way for saving Rs1.6 trillion in the remaining life of projects, The News reported.
The Nepra convened a public hearing, presided by Chairman Waseem Mukhtar, at its Islamabad offices on Thursday. Tariff modifications for Haveli Bahadur Shah, Balloki, NPGCL, and CPGCL power plants were discussed during the hearing.
The goal of this strategic adjustment is to lessen tariff volatility and foreign exchange exposure for users. Additional reforms include reducing the indexation for Operations and Maintenance (O&M) costs from 100% to 70% of rupee devaluation.
Local O&M expenses will now be indexed to either 5% or the 12-month average of the National Consumer Price Index (NCPI), whichever is lower.
Additionally, the return on equity (ROE) structure has been rationalised. Plants will now receive 35% of the ROE as fixed, with the remaining 65% linked directly to the actual operation of the plant — a significant departure from the previous 100% guaranteed ROE model.
These all-prudent measures will result in a projected saving of Rs1.6 trillion over the life of the projects, including Rs22 billion in the current financial year alone, says the press release.
