NEPRA approves final generation tariff for KPCO

September 26, 2025 (MLN): The National Electric Power Regulatory Authority (NEPRA) has approved the final generation tariff for Kot Addu Power Company Limited (KAPCO), setting new rates for the company's 495 MW gas/RLNG and 478 MW LSFO power generation units.

The tariff determination, dated September 23, 2025, was issued under Rule 4(7) of the NEPRA Tariff (Standards and Procedure) Rules, 1998, following KAPCO's submission of an addendum to its tariff petition on February 12, 2025.

Final Tariff Structure

The approved tariff structure includes separate rates for Energy Block I and Block II across different fuel types:

Components
Block
Gas/RLNG (Rs./kWh)
LSFO (Rs./kWh)
Energy Purchase Price:
Fuel Cost Components
I
28.0173
29.3071
II
30.5644
31.7398
V O&M
I
0.9431
1.0841
II
-
-
Capacity Purchase Price:
Fixed O&M
I, II
0.5419
0.5612
Cost of Working Capital
I, II
0.1090
0.1129
ROE
I, II
0.2721
0.2818
Insurance
0.0567
0.0608
Total CPP
0.9818
1.0167
Total CPP @ 87.2%
1.1259
1.1659
Total Tariff
I
30.0863
31.5572
II
32.6333
33.9899

The approved tariff includes several important provisions:

Heat Rate Test Adjustment: The energy charge component relating to fuel costs will be subject to heat rate testing, with operations on simple/open cycle being permitted.

Fuel Cost Indexation: The fuel cost component will be adjusted based on price variations, with reference prices set at Rs. 3442.78/MMBtu for HHV RLNG and Rs. 150,817.50/Ton for LSFO.

ROE Structure: KAPCO will receive 25% of Return on Equity (ROE) as fixed payment based on availability, with additional ROE on actual Net Electrical Output exceeding 25%.

Cost Sharing: The company will share 50% of aggregate savings in fuel, variable and fixed O&M costs with power purchasers annually.

The new tariff will supersede the interim tariff that was granted on April 9, 2025, with all payments to be adjusted accordingly.

The tariff is approved for a maximum term of three years, aligning with the Tripartite Power Purchase Agreement between KAPCO, Central Power Purchasing Agency (Guarantee) Limited, and National Grid Company of Pakistan Limited, dated June 3, 2025.

KAPCO has indicated it will proceed with obtaining necessary internal corporate approvals following NEPRA's determination.

The company disclosed this information to the Pakistan Stock Exchange in compliance with Section 96 of the Securities Act, 2015.

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