ISLAMABAD: Government has decided to take action against NEPRA and challenge it in the court over the tariff of Nandipur Power Plant.

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.

NEPRA has repeatedly turned down requests by the government and its power companies 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 (kilowatt-hour).

The government’s desire could bring this tariff to Rs15.63 per unit — an increase of 34pc. The cost increase is being sought due to project delays, resultant cost overruns, penalties paid to contractors and the cost of laying a gas pipeline to carry imported re-gasified liquefied natural gas (RLNG) to the project site to run the plant at its full 525MW capacity.

NEPRA denied to accept the government wants of increase in tariff and rejected its requests.

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

“We have decided to go into appeal against the NEPRA determinations before a high court,” the official said, adding that “necessary instructions have been passed on to the Northern Power Generation Company Limited”, which operates the Nandipur project, “to complete formalities to move a high court at the earliest”.

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 authority said there was no point of reference to permit the expense of a gas pipeline in the power tariff of the fact that the pipeline ought to be constructed by the gas company, regarded as the gas company’s asset and is a part of revenue requirement of a gas company.