Independent Power Producers (IPPs) have refused to lower electricity rates, including capacity charges, according to sources within the Pakistan Electric Power Company (Pepco).

The IPP owners have warned the government that tampering with their agreements will come at a heavy price.

Sources within PEPCO revealed that the power companies had previously requested the government to reduce the rates of their 52% powerhouses.

The IPP owners have demanded that the government remove the 38% illegal taxes levied on electricity bills.

Sources claim that globally, the Federal Board of Revenue (FBR) collects its own taxes, but in Pakistan, the FBR is incompetent, and the burden of its incompetence is placed on taxpayers through electricity bills.

The IPPs have threatened to approach international arbitration courts if forced to comply.

Sources further revealed that the government should first remove the taxes and lower the rates of its own power plants before entering into negotiations.

Domestic and commercial electricity rates have reached Rs60 to 80 per unit, which is the highest level globally. This has led to the closure of thousands of industries, including textile, steel, and plastic. The load on the LESCO system is down by 24% compared to last year.