On an interim basis, the National Electric Power Regulatory Authority (NEPRA) permitted charging the maximum hydel tariff of RsRs9.118 per kWh on Monday.
It enabled the Neelum-Jhelum Hydropower Project (NJHP) to continue selling energy on a take-or-pay basis with a must-run condition at a provisional tariff of Rs9.118 per kWh. Since October 17, 2019, it has been in place.
The tariff has to pay interest on the debt and return the principal sum of Rs317.367 billion borrowed from foreign and local sources to build this project, costing Rs428.296 billion.
The regulatory body’s decision will determine whether or not this rate is revised. The seller (NJHP) must either obtain a waiver from the Executive Committee of the National Economic Council (Ecnec)/relevant agency or conduct the third-party validation (TPV). NJHP is about to file a tariff petition with the Central Power Purchasing Agency (CPPA) after completing one of the two choices. This decision is direct to the federal government for notification.
It’s worth noting that the seller had requested a 30-year revised rate of Rs10.3 (cents 6.2440) per unit. On June 21, 2021, the regulator convened a public hearing on the tariff petition to establish the project’s rate.
Read more with Estate land news: NEPRA Approves a 21 Paisa Reduction in Disco Tariffs
During the hearing, the authority stated that the project requires a TPV, which has yet to be completed three years after the decision/approval.
To address the issue of TPV, NJHP replied by writing various letters to crucial forums such as the Ministry of Water Resources, Ministry of Planning Development and Reforms, and Planning Commission, copies of which are with NEPRA. According to the seller, the Planning Commission is appointing the consultant who would conduct the TPV.
NEPRA has already expressed its opinion, according to the decision, which is in the project’s tariff determinations of November 19, 2018.