NEPRA Finalizes Generation Tariff for KAPCO’s Gas and LSFO Units

September 26, 2025 — The National Electric Power Regulatory Authority (NEPRA) has issued its final determination on the generation tariff for Kot Addu Power Company Limited (KAPCO), covering the company’s 495 MW gas/RLNG and 478 MW LSFO power plants.

The tariff, approved on September 23, 2025, under Rule 4(7) of the NEPRA Tariff (Standards and Procedure) Rules, 1998, follows KAPCO’s updated tariff petition filed earlier this year.

Key Tariff Highlights:

• Energy Charges (Rs./kWh):
• Block I: Gas/RLNG 28.0173 | LSFO 29.3071
• Block II: Gas/RLNG 30.5644 | LSFO 31.7398
• Capacity Charges (Rs./kWh):
• Fixed O&M: 0.5419 – 0.5612
• Working Capital: 0.1090 – 0.1129
• ROE: 0.2721 – 0.2818
• Insurance: 0.0567 – 0.0608
• Total CPP: 0.9818 – 1.0167
• Tariff (incl. fuel & adjustments):
• Block I: 30.0863 (Gas/RLNG) | 31.5572 (LSFO)
• Block II: 32.6333 (Gas/RLNG) | 33.9899 (LSFO)

Additional Provisions:

• Heat Rate Test Adjustment: Fuel costs will be linked to performance efficiency.
• Fuel Cost Indexation: Adjustments based on market price variations of RLNG and LSFO.
• ROE Mechanism: 25% fixed ROE on availability, with variable ROE for higher output.
• Cost Savings Sharing: 50% of annual savings in fuel and O&M costs to be shared with power purchasers.

The approved tariff will replace the interim tariff granted in April 2025 and will remain effective for up to three years, aligned with the new Tripartite Power Purchase Agreement signed in June 2025.

KAPCO has confirmed that it will move forward with the necessary corporate approvals following NEPRA’s decision and has disclosed the update to the Pakistan Stock Exchange in line with regulatory compliance.