KAPCO rejoins national grid after NEPRA resolves tariff hurdle

ISLAMABAD: Kot Addu Power Company Limited (KAPCO) is back online after more than ten weeks of shutdown, reconnecting to the national grid following NEPRA’s key decision that cleared the tariff restriction which had kept the plant offline since October 1, 2025.

The restoration immediately reinforces power supply reliability in southern Punjab and brings a critical Black Start–capable asset back into the system.

The outage stemmed from tariff limitations tied to the Indicative Generation Capacity Expansion Plan (IGCEP) and Power Acquisition Program (PAP). NEPRA’s determination issued on December 9 provisionally extends KAPCO’s tariff period, allowing immediate operation of its 495 MW gas/RLNG and 478 MW LSFO blocks.

The Authority reached its decision after detailed submissions from ISMO, National Grid Company of Pakistan Limited, MEPCO, CPPA-G and the Ministry of Energy. These entities cautioned that KAPCO’s suspension was straining system stability, complicating congestion management at Multan and Muzaffargarh, and undermining supply to 13 MEPCO grids. NEPRA agreed that the plant remains indispensable under prevailing transmission constraints, noting its continued inclusion in the draft IGCEP 2025–35 for exactly this reason. Under the ruling, KAPCO will operate on existing tariff terms until the IGCEP is finalized or for up to three years in line with the Tripartite Power Purchase Agreement.

NEPRA also addressed several tariff clarifications sought by the company, including rectification of a typographical error in the variable O&M components. The updated determination now correctly reflects block-wise variable O&M charges. The Authority further upheld its earlier decisions on switchyard charges, LSFO inventory cost adjustments, and working capital methodology, maintaining consistency with sector practice.

With the tariff barrier removed, KAPCO’s return restores a major generation source to the system and strengthens operational security across southern Punjab.