Govt Renegotiating IPP Contracts to Cut Electricity Prices: Energy Minister

The federal government is renegotiating contracts with independent power producers (IPPs) to reduce electricity rates across the country, Energy Minister Awais Leghari told Reuters in a recent interview. The energy minister noted that the current power pricing structure was no longer viable and that both the government and IPPs agree that the status quo cannot continue. He said all stakeholders would need to make concessions to reach a sustainable solution that benefits everyone. Due to a lack of funds, the government has passed on new fixed costs and capacity payments to consumers. Meanwhile, some responsible figureheads in the ruling coalition pushing to reduce guaranteed returns, cap the exchange rate for payments in US dollars, and eliminate payments for unused power. Leghari acknowledged that the current electricity rates were unaffordable for both domestic and commercial consumers. He claimed that the government is aiming to reduce tariffs for commercial users from 28 cents per unit to 9 cents. Earlier in the week, Leghari said a detailed review of IPP-related issues had been completed and that positive news would be announced soon. However, he also cautioned that any changes to the contracts would need to be mutual, as the government cannot unilaterally alter agreements without risking a legal situation.