KAPCO back online following NEPRA’s tariff decision

December 11, 2025 (MLN): Kot Addu Power Company Limited (PSX: KAPCO) has resumed operations and rejoined the national grid after more than ten weeks of suspension that began on October 1, 2025.

With the tariff issue resolved, KAPCO’s return strengthens supply reliability in southern Punjab and restores a key Black Start–capable facility to the national system.

The interruption had occurred due to tariff limitations linked with the previously approved Indicative Generation Capacity Expansion Plan (IGCEP) and Power Acquisition Program (PAP) frameworks, according to the Press Release. 

National Electric Power Regulatory Authority’s (NEPRA) latest decision removes this restriction by provisionally extending KAPCO’s tariff period and enabling immediate restoration of its 495 MW gas/RLNG and 478 MW Low Sulphur Fuel Oil (LSFO) generation blocks.

The Authority’s determination came after extensive submissions from the Independent System and Market Operator (ISMO), National Grid Company of Pakistan Limited (NGC), Multan Electric Power Company (MEPCO), Central Power Purchasing Agency (Guarantee) Limited (CPPA-G), and the Ministry of Energy.

These entities warned that KAPCO’s suspension was jeopardizing system stability, hindering congestion management at the Multan and Muzaffargarh grid stations, and affecting reliable power supply to 13 MEPCO grids.

NEPRA acknowledged that KAPCO’s continued operation remains essential due to ongoing transmission constraints and noted that the plant is included in the draft IGCEP 2025-35 for this reason.

The decision allows KAPCO to operate under the approved tariff terms until the IGCEP’s finalization, or up to three years as permitted under the Tripartite Power Purchase Agreement.

NEPRA’s ruling also addresses various tariff clarifications sought by KAPCO, including correction of variable O&M components and revision of LSFO inventory cost treatment in line with industry practice.

The Authority maintained its earlier position on switchyard charges and upheld the established methodology for working capital cost.

With the tariff issue resolved, KAPCO’s return strengthens supply reliability in southern Punjab and restores a key Black Start–capable facility to the national system.

A typographical error in the Variable Operation & Maintenance (O&M) components of the original tariff determination has been rectified.

The corrected tariff table now accurately reflects Block-wise variable O&M charges instead of fuel-wise differentiation, as initially intended in KAPCO’s request.

Copyright Mettis Link News