PM Shehbaz Seeks Proposals to Waive Off Capacity Charges in Electricity Bills

Prime Minister Shehbaz Sharif has sought proposals from the Ministry of Finance and Ministry of Energy to waive off capacity charges in electricity bills.

Ministry of Energy’s Proposal

The Ministry of Energy has proposed paying off the capacity charges of Rs 4 trillion in one installment to avoid further accumulation of circular debt.

Financing the Amount

The Ministry of Energy suggests financing the amount through the Ministry of Finance, enabling the government to provide relief to the people in their electricity bills.

Ministry of Finance’s Conditions

However, the Ministry of Finance has linked the provision of relief to the conditions set by the International Monetary Fund (IMF).

Capacity Payments

The government estimates capacity payments to IPPs amounting to Rs 2,091 billion for the current fiscal year, with the highest payments for nuclear plants.

Understanding Capacity Payments

Capacity payments are made monthly by consumers to maintain the power-producing company’s capacity to generate electricity, ensuring additional demand can be met.

Concerns Raised

Former caretaker commerce minister Gohar Ejaz has raised concerns about the government’s mistakes, warning that if not corrected, they will deteriorate the country’s economic conditions further.

Next Steps

The proposals have been presented to Prime Minister Shehbaz Sharif, but a final decision is yet to be made.

Also Read: Torrential Rains Wreak Havoc in Balochistan