Govt to challenge Nepra tariff for Nandipur power plant in court

The Ministry of Water & Power seeking judicial intervention to jack up the consumer tariff of the Nandipur power project in relevance to the cost of the project.

The power ministry and power companies want to secure Nandipur’s tariff on actual cost seeking Rs. 15.63 per unit tariff, while Nepra has approved the tariff at Rs. 11.64 per unit of the electricity.

The Nepra has refused to accept the government demand of tariff increase and rejected review and reconsideration requests.

The power generation from the plant on this tariff ‘not viable.’

Nepra has rejected the government request to assume the total cost of the 425-525MW Nandipur project at Rs65 billion while determining its tariff. But the regulator has considered the project cost at Rs42bn in a 30-year tariff that averages Rs11.64 per unit.

The power regulator has written time and again that it had allowed all prudent costs in the tariff, and that consumers could not be punished for the omissions or commissions of the project authorities.

An official said there was no precedent to allow the cost of a gas pipeline in the power tariff because the pipeline should be constructed by the gas company, treated as the gas company’s asset and made part of the gas company’s revenue requirement.