The National Electric Power Regulatory Authority (Nepra) on Monday allowed charging the highest hydel tariff of RsRs9.118 per kWh on provisional basis.
It allowed Neelum-Jhelum Hydropower Project (NJHP) to continue selling its electricity at provisional tariff of Rs9.118 per kWh on take and pay basis with must-run condition. This was already effective from October 17, 2019.
The tariff is being charged as to pay interest on debt and repayment of principal amount of Rs317.367 billion taken from outside and local sources for construction of this project that cost Rs428.296 billion.
The regulatory body issued its decision saying that this rate shall be subject to adjustment. The seller (NJHP) either gets a waiver of the requirement of third-party validation (TPV) by Executive Committee of the National Economic Council (Ecnec)/relevant agency or conduct the TPV. Further, it directed NJHP to file a tariff petition through Central Power Purchasing Agency (CPPA) after complying with either of the two options. Nepra has intimated the decision to the federal government for notification.
It is worth mentioning that the seller had sought levelised tariff of Rs10.3 (cents 6.2440) per unit for a period of 30 years. In this regard, the regulator held a public hearing on the tariff petition on June 21, 2021 to determine tariff for the project.
During the hearing, the authority observed that, a TPV needs to be carried out for the project, which has not been done even after three years of the decision/approval.
NJHP responded that it has written several letters to relevant forums like the Ministry of Water Resources, Ministry of Planning Development and Reforms and Planning Commission to address the issue of TPV, copies of which were also shared with Nepra. The seller informed that according to the Planning Commission the consultant to be hired for conducting TPV is at the appointment stage.
According to the decision, Nepra has already held its opinion, which is reflected in the project’s tariff decisions dated November 19, 2018.