Discussions with the International Monetary Fund regarding captive power plants are ongoing, which could lead to a reduction of electricity prices by Rs10 to Rs12 per unit, Energy Minister Awais Leghari said on Thursday.

“A decision regarding captive power gas would be made within a month,” he told reporters after appearing in the National Assembly Standing Committee on Energy.

The energy minister mentioned that residential consumers have already received a Rs4 relief in electricity tariffs and that prices could potentially be reduced by Rs10 to Rs12 rupees per unit.

He noted that contracts with five IPPs have been terminated while the cabinet has approved a tariff revision for eight bagasse plants. “Discussions are ongoing with sixteen IPPs, after which the focus will shift to government IPPs.”

The returns on equity for government plants would be reviewed next, Leghari said and added that the K-Electric was seeking a profit of Rs500 billion over the next five to seven years, which he “believes is unjustified.”

While speaking about the Khyber Pakhtunkhwa, he said that the National Electric Power Regulatory Authority would make the final decision.

Leghari said that negotiations with independent power producers have begun to have a “positive impact” on the people, with electricity prices already decreasing. He claimed that savings of Rs1,100 billion have been achieved thus far.

“It is now the turn of government power plants in the negotiations with IPPs and all contracts with these producers will be reviewed,” Leghari said and assured that the review would lead to “significant savings” for the people, with plans to present contracts with an additional 15 IPPs to the cabinet.

He mentioned that 75% of the total cost of electricity consists of capacity charges. He revealed that there have been four meetings with the KP chief minister, during which, at his request, electricity was left open on feeders with the highest theft rates. An agreement was made to open electricity supply first and then remove illegal connections, he said.