ISLAMABAD: As the citizens grapple with exorbitant electricity bills, a high-level business delegation will meet President Asif Ali Zardari on Thursday to discuss concerns of the business community over independent power producers’ (IPPs) excessive capacity charges and their far-reaching impact on the economy and the general public.

The delegation of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), headed by Chairman of Economic Policy and Business Development Think Tank Gohar Ejaz, will brief the president on IPPs’ capacity charges. He will be accompanied by 45 presidents of different chambers of commerce and industries.

The FPCCI has already announced challenging the agreements with IPPs in the Supreme Court.

Gohar Ejaz said a detailed report on the IPPs will be shared with the president.

According to the report, Pakistan’s power generation capacity stands at 43,500MW, with 52 per cent of the plants held by the government, 28pc by the private sector, and 20pc by foreign investors.

All IPPs operate on a ‘take or pay’ basis, which means they will get full capacity payments even if they do not produce electricity. According to the report, government plants operate at 33pc capacity and charge Rs950 billion per year, whereas private plants operate at 36pc capacity and charge Rs1.15tr per year as capacity payment.

The report said all consumers — domestic, commercial, industrial and agricultural — pay extraordinarily expensive electricity costs ranging from Rs60 to Rs80 per unit.

They are seeking capacity payments based on the actual electricity produced, at a rate of Rs8 per unit, rather than the installed capacity, which is Rs24 per unit.

Published in Dawn, August 1st, 2024